Gold bars to be exempt from tariffs, White House clarifies
On Monday, Citi analysts, led by Andrés Cardona, upgraded YPF S.A. (NYSE:YPF) stock from Neutral to Buy and increased the price target to $48.00, up from the previous $44.00. The upgrade comes as YPF, a prominent player in the Oil, Gas & Consumable Fuels industry, has demonstrated strong performance with a 53% return over the past year. According to InvestingPro data, the company maintains a robust market capitalization of $14.5 billion and has been profitable over the last twelve months. The upgrade reflects a comprehensive model update to account for YPF’s new business plan, which offers more detailed projections for the company’s shale oil segments in the Vaca Muerta formation, including core, north, and south acreages.
The revised model by Citi incorporates various scenarios for YPF’s potential liquefied natural gas (LNG) projects. However, only the Southern Energy component, specifically Phases 2 and 3, is included in the base case, with the other phases considered as potential upside scenarios. InvestingPro analysis reveals that YPF has achieved impressive revenue growth of 132% in the last twelve months, with analysts predicting continued profitability this year despite expectations of lower net income.
Citi’s decision to raise the price target is based on several key factors. Firstly, there is an anticipated reduction in country risk, with the basis points decreasing from 700 to 650. Secondly, the analysts expect an improved outlook for the Downstream sector. Lastly, the new development models for YPF’s Vaca Muerta shale oil projects have prompted a more optimistic valuation.
In their analysis, Citi highlighted that the adjusted target price is supported by YPF’s projected trading at a ratio of 4.2x to 4.0x its 2025-26 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). Current InvestingPro data shows YPF trading at an EV/EBITDA of 5.75x and a P/E ratio of 10.9x, with an overall Financial Health Score rated as GREAT, suggesting strong fundamental positioning in the market. This valuation suggests a favorable investment profile for the Argentine energy company in the eyes of the analysts at Citi. The upgraded rating and price target indicate a positive perspective on YPF’s financial and operational prospects, as outlined in the firm’s updated business strategy.
In other recent news, Eni has signed a memorandum of understanding with Argentina’s state-run oil producer YPF for potential involvement in an LNG project in Argentina. This project aims to develop the onshore "Vaca Muerta" gas field, with plans to export up to 30 million tons of LNG annually by the decade’s end. The agreement outlines the development of upstream, transportation, and liquefaction facilities, utilizing two floating LNG units with a combined capacity of 12 million tons per year. Meanwhile, HSBC has upgraded YPF’s stock rating from Reduce to Hold, raising the price target from $21.00 to $33.00. This upgrade reflects a positive outlook on Argentina’s economy and energy sector, along with YPF’s restructuring plan that focuses on more profitable, export-oriented hydrocarbon production. Additionally, Equinor is exploring market interest for its assets in the Vaca Muerta region, where YPF operates two significant areas: Bandurria Sur and Bajo del Toro Norte. Equinor holds a 30% stake in Bandurria Sur, valued at approximately $0.9 billion, and a 50% stake in Bajo del Toro Norte, valued at around $0.4 billion. These developments indicate active interest and strategic shifts in Argentina’s energy landscape.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.