UPDATE: UBS Downgrades Cobalt (CIE), Marathon Oil (MRO) and RSP Permian (RSPP) to Neutral

(Updated - January 27, 2015 11:52 AM EST)

UBS downgraded Cobalt International Energy (NYSE: CIE) from Buy to Neutral. Marathon Oil (NYSE: MRO) and RSP Permian (NYSE: RSPP) were also downgraded to Neutral. 2015 Brent/WTI forecasts were cut to $52.50/$49, and 2016 estimates were cut to $67.50/$62.50.

"We cut our 2015-16 Brent/WTI forecasts ($/Bbl) to $52.50/$49 & $67.50/$62.50 to reflect the much steeper than expected plunge in oil prices since our last update & continued short-term oversupply (~1.3 MMBbld in 2015E). However, we believe the sharp cuts to capex should support a longer-term recovery & have maintained our normalized forecasts of $90/$85," said analyst William A. Featherston.

"We reduced our 2015-16 US natural gas price forecasts ($/MMBtu) by $0.50 to $3.25/$3.75 on stronger than expected supply growth & a near-term need to rebalance ~2.5 Bcfd of oversupply in the market; we've lowered our normalized forecast to $4.50 (from $5.00), a price we believe is sufficient to incentivize supply to meet the material pick-up in demand growth post 2016," he continued.

"We're downgrading MRO, CIE, & RSPP to Neutral (from Buy). We are cautious on several names with wide FCF deficits, slowing growth profiles and rich relative valuations: COP, DVN, MUR, UPL, RRC, DNR & MHR. Top Buys are APC, CHK & EOG," he added.

For an analyst ratings summary and ratings history on Cobalt International Energy click here. For more ratings news on Cobalt International Energy click here.

Shares of Cobalt International Energy closed at $8.30 yesterday.

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