A near-40% fall in the shares has made Cairn Energy (LON:CNE) an attractive investment, according to influential broker Goldman Sachs.
Analyst Ruth Brooker says the risk/reward looks worth it, upgrading the stock to ‘buy’ from ‘hold’.
Fellow City firms Investec and Panmure Gordon repeated the trick, but similarly lowered their target prices following the share price slide.
Goldman now has a 250p target price (previously 285p), while Investec and Panmure both have 220p targets on the oil group.
That compares with a current market price of 170p, up 1.7% on Thursday following the string of upgrades.
Goldman’s Brooker said: “We estimate the market is valuing Cairn at: net cash (incl. 2014 exploration capex) + risked developments + Cairn India stake risked at c.33%.
“We believe this risking is overdone versus our assumption of 50%, and at this level we see an attractive risk/reward opportunity particularly given the upcoming elections in India in 2Q14.”