MARKET TALK: BofA Merrill Lynch Downgrades BP To Neutral

17th Jun 2010 12:30

1130 GMT [Dow Jones] Bank of America Merrill Lynch downgrades BP (BP.LN) to neutral from buy. Says the potential recovery is now set to take well beyond the brokerage's 12-month investment horizon and notes real risk there will be no resumption in the dividend in FY'10/1Q'11. Says the outcome of the meeting with Obama provides little comfort or clarity. While BofA believes the asset base is deep enough to help BP weather the storm, it thinks the measures taken as a result of the oil spill will materially erode the group's competitive advantage versus peers for the foreseeable future. Cites the $20Bln escrow fund with no cap and excluding penalties, the dividend suspension, the capex cut and asset disposals. Has 400p price target. BP +7.1% at 361p. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires June 17, 2010 07:30 ET (11:30 GMT)