Canaccord Genuity cuts target price on Premier Oil

Analysts at Canaccord Genuity cut their target price on independent upstream oil and gas company Premier Oil from 55.0p to 20.0p on Monday, stating it had identified some "valuation sensitivities" following its recent restructuring.

Canaccord said Premier's first-half results were overshadowed by the balance sheet restructuring update, and in particular its plans to raise $530.0m equity - $300.0m more than previously expected.

Looking at valuation sensitivities related to the equity raise pricing and commodity price assumptions, Canaccord said it thinks that a long term Brent expectation of more than $55.0 per barrel and an equity raise around current trading levels would provide a strong investment case but stated it was "currently more cautious" and assuming just $50.0 per barrel.

"For now we reset our target price at 20p based on our risked net present value core production and development valuation and we maintain our 'hold' rating," said Canaccord.