Anadarko Petroleum (APC) Stock Downgraded at BMO Capital
NEW YORK (TheStreet) -- Anadarko Petroleum (APC) - Get Report stock was downgraded to "market perform" from "outperform" at BMO Capital Markets on Wednesday morning.
The lower rating comes as the oil and gas company's shares are trading in line with the firm's $50 price target.
BMO's previous rating was based on Anadarko's low maintenance capex, quality asset base, exploration optionality and valuation.
"Low maintenance capex ($1.8 billion vs. $2.8 billion three-year average) is playing out in 2016 with first oil from Heidelberg and TEN enhancing capital efficiency. Mega project growth after 2016 is less clear, implying higher maintenance capex, with Paon, Mozambique, and Shenandoah still in appraising or awaiting FID," the firm wrote in a note.
BMO does not see a catalyst for the exploration premium to return to the stock, while recent comments and asset sales from Shenandoah partners imply downside to the firm's valuation.
Shares of Woodlands, TX-based Anadarko closed at $50.10 on Tuesday.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.
The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: APC
