TD Newcrest Downgrades Nexen Inc. (NXY) to Hold on Valuation and Outlook; Buzzard Compromises Quarter

TD Newcrest downgraded Nexen Inc. (NYSE: NXY) from Buy to Hold. PT lowered from C$29 to C$27.

TD analyst said, "Like many others, we were caught out by unplanned Buzzard downtime which caused production to fall 3% short of our estimate (and 4.1% short of Street consensus)...This effectively set the tone for the quarter and was exacerbated by continued uncertainty with respect to civil unrest in Yemen, the timing of resumption of drilling in the GoM, production ramp-up at Long Lake, and the potential impact of the proposed Nigerian Petroleum Industry Bill."

"We have made several revisions, including higher cash taxes and lower
production (we expect it to trend towards the lower end of the 2011 guidance range of 230-270 mBOE/d over time). On this basis, our target price falls to $27/share. Given 1) a total return of only 14% and 2) uncertainty with respect
to the aforementioned projects, we are downgrading the stock."

For more ratings news on Nexen Inc. click here and for the rating history of Nexen Inc. click here.

Shares of Nexen Inc. closed at $25.22 yesterday.

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