PetroChina Co. Ltd.'s
) dismal third quarter showing, we are downgrading the Chinese
energy giant to Underperform from Neutral. The Beijing-based
integrated outfit recently posted weak quarterly results on the
back of a challenging operating environment and persistent refining
We also remain concerned by PetroChina's oil production growth
prospects, considering its heavy exposure to significantly
mature-producing areas. Other near-term headwinds include
high-priced gas imports amid low domestic gas sale prices, policy
uncertainty and an ambitious investment program.
Considering these factors, we see PetroChina as a risky bet that
investors should exit. These factors are reflected in our downgrade
of PetroChina ADRs to Underperform from Neutral. Our $123 price
objective reflects a multiple of 5.5X the trailing twelve-month
PETROCHINA ADR (PTR): Free Stock Analysis
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