JPM reshuffles ratings deck ahead of 2022 - MUR up, MGY & CNX down
Dec. 07, 2021 10:07 AM ETMurphy Oil Corporation (MUR)SU, CNX, MGY, CO1:COM, SU:CABy: SA News Team1 Comment
- JPMorgan's mid-cap oils analyst out with new ratings ahead of 2022, boosting Murphy (NYSE:MUR) to buy while cutting CNX (NYSE:CNX) and Magnolia (NYSE:MGY) to hold
- The analyst noted key project deliveries at MUR, namely Khaleesi, Mormont and Samurai in the Gulf of Mexico, along with Suncor (NYSE:SU) operated Terra Nova, driving an inflection in free cash flow
- On the downgrades, higher gas exposure and an underwater hedge book drove the rating change at CNX while MGY took a hit from JPMorgan on premium valuation
- The forced ranking methodology from JPMorgan includes an amalgamation of metrics, but suffice to say the analyst is looking for commodity price exposure to drive free cash flow in 2022, given JPMorgan's $125 Brent (CO1:COM, USO) forecast