Broker snap: Cairn's on the right track, says UBS

29th Aug 2012 12:27

UBS has maintained its 'neutral' rating for oil giant Cairn Energy, saying that while the company is going in the right direction, there's still 'some way to go'."Following Cairn's 1H we feel the company is now well on the way to having the foundations for becoming a full cycle E&P with exposures to various levels of risk: low risk development in the North Sea, low/medium risk exploration in the North Sea, and higher risk, and frontier exploration in Greenland, Spain, Morocco, and potentially Cyprus," the broker said on Wednesday."Yet with development and high impact exploration not kicking in until late 2013/2014, we are still of the view that it is too soon to change our 'neutral' view on the stock."UBS has increased its core net asset value (NAV) per share forecast from 293p to 304p and raised its target price from 275p to 300p. "Cairn is trading at a 3% discount to core NAV versus the sector on a 2% premium."By 12:26, shares were up 0.28% at 284.5p.BC