NXY) has been downgraded from Neutral to Underperform.
The company reported mixed results for the first quarter of 2012
with earnings coming in below the Zacks Consensus Estimate.
Revenues came in approximately 13% above the Zacks Consensus
Production also decreased in
the quarter mainly due to the expiry of the Masila
contract in Yemen in December 2011. Though the
production guidance for the year has been
maintained, we are skeptical about the company s
sustainable operational and execution abilities in
Low gas prices and execution risk are
other concerns. Given these headwinds, we expect
shares of Nexen to be under pressure in the near
future. As such, we see no upside in the stock from
the current level. Our target price for Nexen is $15.
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