Barclays downgrades Enquest to 'underweight' due to government levy
Analysts at Barclays downgraded their recommendation for shares of Enquest on the back of the government's recently announced plan for a levy on energy companies' profits.
EnQuest
11.82p
16:38 14/11/24
3.50%
0.40p
FTSE All-Share
4,417.25
16:54 14/11/24
n/a
n/a
FTSE Small Cap
6,809.22
16:39 14/11/24
n/a
n/a
Oil & Gas Producers
7,938.55
16:38 14/11/24
0.88%
69.09
The recommendation went from 'neutral' to 'underweight' with the analysts estimating the tax would reduce the outfit's free cash flow across 2023-26 by $450m.
That equated to a 36% cut to the company's discounted cash flow valuation and put Enquest's debt refinancing plans back in focus "just as higher oil prices and improved operating performance had eased concerns."
In turn, the analysts lowered their target price for the shares from 40.0p to 23.0p.