Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Monday, Morgan Stanley (NYSE:MS) downgraded Equinor ASA (EQNR:NO) (NYSE:EQNR) stock from Overweight to Equalweight, adjusting the price target to NOK250.00 from the previous NOK285.00. The revision by the firm’s analysts comes amid changing market conditions for the energy sector.
The downgrade reflects a shift in the oil market outlook, which has seen a recent deterioration. In contrast, European natural gas fundamentals remain tight, with Europe needing a significant number of LNG cargoes to replenish its inventories before the next winter season. Equinor, with its focus on natural gas, is seen by Morgan Stanley as a direct investment opportunity to leverage this demand.
Despite the downgrade, Morgan Stanley’s analysts still see potential in Equinor’s performance. They expect the company’s net income in 2025 to be approximately 11% above the consensus gathered by Visible Alpha. For 2026, they anticipate a smaller downside of around 9% to consensus, which is notably less than the 20-30% lower figures they project for other major energy companies.
The analysts noted that the current share prices do not fully reflect the positive environment for natural gas. They believe this is due to the narrative surrounding offshore wind and recent decisions made by Equinor regarding capital allocation. These factors have influenced the company’s stock performance and have been taken into account in the revised rating and price target.
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