Repsol upgraded to Overweight from Equal Weight at Morgan Stanley
Morgan Stanley analyst Sasikanth Chilukuru upgraded Repsol (REPYY) to Overweight from Equal Weight with a price target of EUR 13.30, up from EUR 12. The firm adjusted ratings in the European energy group, saying the sector's 'fortunes remain closely tied to oil markets.' Morgan Stanley expects oil to enter a 'meaningful surplus' after the summer. As such, it foresees downside risk to earnings and buybacks, upside risk to net debt, and does not find valuations compelling at current share levels. The firm took its industry view back to 'Cautious.' However, Repsol's key message from the Q1 earnings conference call was the commitment to maintain high distributions, contends Morgan Stanley.
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