The Rising Influence of Rising Affluence

[DewDiligence]

Credit Suisse raises rating on HES:

http://blogs.barrons.com/stockstowatchtoday/2013/10/31/exxon-mobil-all-good-but-the-refining-credit-suisse-upgrades-hess

We are raising our NAV to $112/sh for HES on the basis of (1) better Bakken Well costs; (2) higher Bakken drilling activity; and (3) more credit for the Utica.

With disposal proceeds still to come, the balance sheet is being de-risked and growth through 2018 looks assured. The pro forma EV/CF [Enterprise Value / Cash Flow] multiple in 2014 looks too low.

HES should outperform the Majors. While HES is not a pure play shale company and the returns on the Bakken are not as good as other plays, supporting a lower overall multiple, we see 25% upside through the next 6 months. Our $100/sh target represents a 12% discount to NAV, the typical point at which SOTP [Sum of The Parts] stories run out of steam.

I'll have more to say about HES after I listen to the 3Q13 CC.