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Imperial Oil Downgraded to Neutral From Buy by Goldman Sachs After Outperformance Versus Peers, Price Target Kept at C$39

05/12/2021 05:36

09:34 AM EDT, 05/12/2021 (MT Newswires) -- Imperial Oil (IMO) received an investment rating downgrade Wednesday to neutral from buy from Goldman Sachs following recent outperformance in the Canadian petroleum company's stock versus its peers.

Goldman Sachs kept its price target on the company's Canadian shares at C$39, which is slightly above the shares' Tuesday closing price of C$37.44.

Over the past three months, Imperial Oil's Canadian shares have jumped 46% while its US shares are up 54%.

The Canadian shares have climbed 22% since Goldman Sachs added the stock to its Americas Buy List on March 7, the firm noted, versus an average gain of just 1% in Canadian sands peers during the same time period.

"In our view, strong earnings execution, operational/cost performance, and commitment to capital discipline have been key drivers of outperformance versus peers," Goldman Sachs analysts said in a note to clients.

The firm's positive view on Imperial Oil has been driven by an "operational and cost turnaround story" at the company's Kearl oil sands mine, positive revisions to cash flow, and improving downstream fundamentals, the analysts said.

"While our view on these pillars has not changed, we see them as better reflected in the current stock price with shares approaching our 12-month price target of C$39," the Goldman Sachs analysts added.

On average, analysts polled by Capital IQ have a hold investment rating on Imperial Oil's Canadian shares, with price targets ranging from C$31 to C$42.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

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