Broker snap: Cairn nears India sale

3rd Mar 2011 11:35

UBS raises the target price for Cairn Energy, as confidence improves in the oil producer's Greenland prospects, while the sale of its Indian unit moves closer.The target price is raised by 25p as the broker thinks that the shares are reflecting some hope of early summer mobilisation and drilling in Greenland.However, "it is our view that Cairn's drilling campaign in Greenland will likely prove more difficult than originally expected, with potentially deeper water drilling required," says UBS.Meanwhile, press articles on Wednesday suggest that the Indian cabinet is closer to a resolution of the Cairn sale of a 40-51% stake in Cairn India to Vedanta.While a 'neutral' rating is kept, the broker raises the target price to 440p, from 415p, as it expects the shares could trade higher on what it views as a momentum trade.