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Tuesday saw Kepler Cheuvreux adjust its stance on Aker ASA (AKER:NO), downgrading the company’s stock rating from Hold to Reduce. Accompanying this downgrade was a decrease in the price target, now set at NOK570.00, reduced from the previous NOK620.00.
The revision by Kepler Cheuvreux comes as the firm reevaluated Aker ASA’s holdings, particularly in light of a reduced oil price scenario. Aker ASA, an investment company with a strong correlation to Brent crude oil prices, has seen its share price closely track the commodity’s movements with a coefficient of approximately 0.83x since 2015.
Aker BP (NYSE:BP), which represents about 45% of Aker ASA’s adjusted net asset value (NAV), experienced a significant revaluation. Kepler Cheuvreux analysts slashed the fair value estimate for Aker BP by approximately 29%. This adjustment reflects the impact of the lower oil price forecast on Aker ASA’s largest holding.
Despite the downgrade for Aker ASA, Kepler Cheuvreux has a positive outlook on Aker Solutions, the second-largest holding of Aker ASA, constituting around 20% of its adjusted NAV. Aker Solutions recently received an upgrade to Buy from Kepler Cheuvreux, with a target price set at NOK40.
The reevaluation and consequent downgrading of Aker ASA’s stock rating to Reduce, with a lowered price target, indicates Kepler Cheuvreux’s cautious stance on the company’s future performance amid a changing oil price landscape. The firm’s detailed analysis takes into account the direct effects of these price changes on Aker ASA’s key holdings, leading to the updated investment recommendation.
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