Statoil upgraded to Buy at BAML, shares rise

|About: Statoil ASA (STO)|By:, SA News Editor

Statoil (STO +3.7%) is upgraded to Buy from Neutral with a $25 price target, up from $23, at BofA/Merrill after yesterday's announcement of the Bay du Nord discovery off eastern Canada.

BAML likes STO's "sensible strategy" of targeting modest production growth, balanced with respectable return investments carrying relatively low execution and political risk.

Investors need patience before true earnings potential of STO's projects becomes apparent, but $18B of recent disposals shows the inherent value as well as management's commitment to shareholders.