Analysts at Macquarie have revised the price target and rating for Australian oil explorer, Carnarvon Energy (ASX:CVN), taking into account the increased risking on the Dorado project and cash balance.
Consequently, shares of Carnarvon Energy (ASX:CVN) have fallen by 3.2%, standing at A$0.150.
Macquarie has downgraded the target price from A$0.14 to A$0.10 and the rating from ‘neutral’ to ‘underperform’.
They mentioned that legal difficulties with offshore energy have rendered new projects uninvestable until the specifications for consultations can be more precisely defined.
Macquarie noted that there are few reasons for Carnarvon Energy to improve its rating considering that the final investment decision for Dorado seems to be postponed until the regulatory circumstances get better.
Furthermore, Dorado might face delays and Carnarvon Energy (ASX:CVN) may decide to utilize its cash balance for low-quality mergers and acquisitions.
According to LSEG data, 3 out of 6 analysts recommended buying the stock or rating it higher, while 3 advised to ‘hold’ it; their median price target for the stock is A$0.23.
Despite the current developments, Carnarvon Energy’s stock has risen 3.3% year-to-date until the previous close.
Carnarvon Energy (ASX:CVN) is an Australian company engaged in oil and gas exploration.