-Citigroup notes Hess (NYSE:HES) remains their top pick of the US oil majors. Firm is raising their target price to $68 from $58, to reflect expectations of multiple expansion as management enters the execution phase of a turnaround strategy that matures over the next year.
2006 promises the 1st of a multi-year period of growth in oil & gas prod'n: key projects are running ahead of schedule; 2006 is also a stellar year for reserve replacement and the 4th year of consecutive reserve life growth but captures only a fraction of the resource secured by current management.
The value gap vs its peers is tangible, with HES the only major trading below SEC value. Exploration is an upside; but the shares already ignore a growing list of unbooked discoveries where value is verified by recent transactions.
Credibility is an old excuse for current misvaluation. Execution is the catalyst to force a rerating as the impact of a multi year t/around becomes tangible. If the market does not recognize
this, the firm believes someone else will. Reits Buy.
Notablecalls: The wording of the call is strong enough to give me goosebumps!
2006 promises the 1st of a multi-year period of growth in oil & gas prod'n: key projects are running ahead of schedule; 2006 is also a stellar year for reserve replacement and the 4th year of consecutive reserve life growth but captures only a fraction of the resource secured by current management.
The value gap vs its peers is tangible, with HES the only major trading below SEC value. Exploration is an upside; but the shares already ignore a growing list of unbooked discoveries where value is verified by recent transactions.
Credibility is an old excuse for current misvaluation. Execution is the catalyst to force a rerating as the impact of a multi year t/around becomes tangible. If the market does not recognize
this, the firm believes someone else will. Reits Buy.
Notablecalls: The wording of the call is strong enough to give me goosebumps!
No comments:
Post a Comment