DJ Goldman Downgrades ConocoPhillips, Upgrades Marathon Oil
15 Mar 12:33
NEW YORK (AP)--Goldman Sachs shifted ratings on four oil and gas companies -
including a downgrade of ConocoPhillips (COP) - to reflect new assumptions
about growth and an outlook for higher oil prices this year.
Analyst Arjun N. Murti said in a client note that he has "increased
confidence" in a bullish outlook for the crude oil market this year, due to
rising oil demand in a market tight on supply. He forecast stronger refining
margins in 2007, particularly in the U.S. Midwest.
Murti effectively swapped ConocoPhillips for Marathon Oil Corp. (MRO) in his
ratings of large, integrated oil companies, dropping ConocoPhillips down to
"Neutral" and bumping up Marathon to a "Buy."
Although ConocoPhillips' shares "remain inexpensive relative to asset value,"
Murti said he doesn't believe the company is likely to improve its
profitability relative to peers in 2007. Meanwhile, he expects Marathon has
greater potential for per-share earnings growth than rivals and believes the
company's production growth should top that of ConocoPhillips.
Shares of ConocoPhillips fell 50 cents to $67.41, while Marathon shares rose
$1.41 to $94.81 in morning trading on the New York Stock Exchange.
The analyst removed Frontier Oil Corp. (FTO) from Goldman's "Americas Sell"
list and rated the stock "Neutral," due to the refiner's exposure to strong
Midwest refining margins. Frontier shares picked up 32 cents to $31.48 in
morning trading on the New York Stock Exchange.
He added Anadarko Petroleum Corp. (APC) to the "Americas Sell," effectively
removing its "Neutral" rating, saying that it will likely take until 2008
before investors can truly evaluate "whether the 'new' Anadarko is better than
the 'old,'" Murti said.
Anadarko is undergoing a makeover since acquiring two major oil companies
last year. Since buying Kerr-McGee and Western Gas Resources in separate deals
in August, the company has been selling off other assets to cut down its
roughly $26 billion debt by more than half this year. Anadarko shares fell 27
cents to $39.82 on the New York Stock Exchange.
A barrel of oil for April delivery rose 10 cents to $58.26 in morning trading
on the New York Mercantile Exchange.
(END) Dow Jones Newswires
03-15-07 1233ET
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