Citi analysts Pedro Medeiros and Fernando Valle downgraded the stock of Eike’s oil company from Buy to Neutral. The research group has also reduced the price target of OGX’s stock from R$20.50 to R$ 7.70. The downgrade was justified by the average flow rates of 5,000 barrels of oil per day (the market expected 20,000), higher operational costs per well, and delays in the production curve.
“We have reduced the price target to reflect changes of the company’s [lower] production flow levels,” the analysts justified.
On the other side of the table, believe it or not, Itau BBA has an outperform rating for the stock. Here is what Itau BBA’s Paula Kovarsky wrote in a note to investors regarding OGX stock:
“We are reducing our 2012 fair value down to R$14.8 from R$21.2… Despite the 30% haircut in fair value, we maintain our outperform recommendation for OGX grounded on the company’s long-term potential value.”