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On Monday, HSBC analyst Liyanna Yang upgraded YPF S.A. (NYSE: YPF) stock rating from Reduce to Hold, while also increasing the price target to $33.00, up from the previous $21.00. The adjustment reflects a positive shift in the assessment of the company’s prospects, influenced by several key factors. The company, currently trading at $30.03 with a market capitalization of $14.7 billion, has demonstrated strong performance with a 41.85% return over the past year. InvestingPro analysis reveals 8 additional key insights about YPF’s performance and prospects.
The upgrade is attributed to an improved outlook for Argentina’s economy, energy sector, and YPF’s internal restructuring plan. Yang noted that recent developments, such as Argentina’s $20 billion loan agreement with the International Monetary Fund and the removal of foreign exchange controls, have favorably impacted funding costs for YPF and heightened investors’ interest in Argentine equities. The company’s financial health score of "GOOD" from InvestingPro supports this positive outlook, with impressive revenue growth of 226% in the last twelve months.
Additionally, the Argentine government’s dedication to advancing the nation’s energy sector has been a significant influence on HSBC’s reassessment. The new management team at YPF, which took over earlier last year, is spearheading this development. They are making strides with important crude midstream investments, such as Oldeval’s Duplicar project and the VMOS project, which benefits from the RIGI tax incentive scheme. These initiatives are seen as crucial steps in mitigating risks associated with Argentina’s oil industry.
The restructuring plan of YPF itself is also a contributing factor to the upgraded rating. The company is concentrating on more profitable, export-oriented unconventional hydrocarbon production while planning to divest its less profitable conventional assets. This strategic shift is primarily focused on crude in the years 2025-26, with the potential for gas to become a more significant component post-2027.
HSBC’s revised stance on YPF stock indicates a more constructive view of the company’s future performance, considering the broader economic and sector-specific improvements in Argentina. The new price target of $33.00 represents HSBC’s confidence in YPF’s ability to navigate the evolving landscape and capitalize on the opportunities presented by the country’s macroeconomic and energy sector advancements. Trading at a P/E ratio of 7.63 with earnings per share of $5.14, investors awaiting the next earnings report on May 8, 2025, can access comprehensive analysis and valuation metrics through InvestingPro’s detailed Research Report, part of its coverage of over 1,400 US equities.
In other recent news, Equinor has begun assessing market interest in its assets located in the Vaca Muerta region of Argentina. These assets include two significant areas: Bandurria Sur and Bajo del Toro Norte. Bandurria Sur is a major shale oil block, with Equinor holding a 30% stake, while YPF and SHEL own 40% and 30%, respectively. This block produces approximately 70,000 barrels of oil equivalent per day, with the majority being oil. Energy research firm Wood Mackenzie has valued Equinor’s stake in Bandurria Sur at around $0.9 billion, based on a Brent crude oil price of approximately $70 per barrel. The other area, Bajo del Toro Norte, remains undeveloped, and Equinor shares a 50% stake with YPF. Wood Mackenzie estimates the value of Equinor’s stake in this block at about $0.4 billion under similar price assumptions. These recent developments highlight Equinor’s strategic moves in the energy sector.
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