Parsley Energy Class A (PE)

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Parsley Energy, Inc. (PE)
Marathon Oil cut to Sell equivalent, Parsley upgraded at Morgan Stanley
May 19, 2020 11:31 AM ET|About: Marathon Oil Corporation (MRO)|By: Carl Surran, SA News Editor
Marathon Oil (MRO -2.8%) sinks after Morgan Stanley downgrades shares to Underweight from Equal Weight with a $5 price target, saying it is "unwarranted" for the stock to be trading in-line with peers given the company's "more challenged outlook."

Marathon "screens challenged vs. peers with a 2021 WTI breakeven of $37/bbl... and year-end 2021 leverage that rises to 4.5x at strip, above the peer median of ~2x," Stanley analyst Devin McDermott writes.

At the same time, McDermott upgrades Parsley Energy (PE -0.3%) to Overweight from Equal Weight, citing "peer-leading" free cash flow yield and well cost reductions.

The firm favors "producers with scale and/or asset bases to support resiliency at low prices and outsized free cash generation as commodity prices improve - those positioned to survive the downturn and thrive during the recovery" - including Chevron (CVX -1.7%) within integrated oils, and Hess (HES -3.5%), Noble Energy (NBL -5.3%), Cimarex Energy (XEC -1.9%) and Parsley among E&Ps.

MRO's average Wall Street analyst rating, Seeking Alpha Authors' Rating and Quant Rating all are Neutral.

PE's average Wall Street analyst rating and Seeking Alpha Authors' Rating are Bullish, while its Quant Rating is Neutral.

https://seekingalpha.com/news/3575976-marathon-oil-cut-to-sell-equivalent-parsley-upgraded-morgan-stanley