Seeking Alpha

Expectations for Oasis midstream too optimistic, Stanley says in downgrade

|About: Oasis Petroleum Inc. (OAS)|By:, SA News Editor

Oasis Petroleum (OAS -5.5%) plunges after Morgan Stanley downgrades shares to Equal Weight from Overweight with a $6 price target, cut from $7, citing a broad pullback in the group that has left most of stocks in the sector trading at low multiples relative to history.

Stanley analyst Devin McDermott also says expectations for what OAS could receive if it pursues a midstream monetization could "prove optimistic."

McDermott, who slightly reduced his outlook for oil prices and more meaningfully his price guidance for natural gas and natural gas liquids forecasts, also downgraded Occidental Petroleum.

OAS' average Sell Side Rating is Outperform, while both its Seeking Alpha Authors' Rating and Quant Rating are Bullish.

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