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On Wednesday, UBS analyst Luiz Carvalho raised the investment stance on YPF S.A. (NYSE:YPF), an Argentina-based oil and gas company, from Neutral to Buy. Accompanying the upgrade, the price target for the company’s shares was also increased, set at $27.00, up from the previous $18.00.
Carvalho cited several factors behind the optimistic outlook for YPF. The potential for oil and gas operators to operate more freely could enhance YPF’s pricing policy in oil and fuel. Additionally, the possibility of reduced capital expenditures and overall expenses was noted as a positive influence. Carvalho also pointed to the potential for a re-rating of the stock, driven by the aforementioned factors and potential macroeconomic improvements in Argentina.
YPF and the newly elected government have introduced an ambitious “4×4” plan that aims to quadruple the company’s value within the next four years. This plan is expected to contribute to guidance for higher overall oil and production.
Despite the acknowledgment of Argentina’s challenging macroeconomic environment, UBS draws parallels with the improvements seen in Petrobras from 2017 to 2022. Petrobras’ progress during that period is considered a benchmark for YPF’s potential trajectory, with improvements in efficiency and capital allocation that could lead to a lower risk perception among investors.
InvestingPro Insights
Following the UBS upgrade of YPF S.A. (NYSE:YPF), current data from InvestingPro shows a company that is capturing analysts’ attention. With a significant 91.38% revenue growth over the last twelve months as of Q3 2023, YPF appears to be on an aggressive growth trajectory. This aligns with the analyst’s view of the company’s potential for enhanced operations and pricing policy in oil and fuel.
InvestingPro Tips suggest that YPF is trading at a high earnings multiple, with a P/E ratio of 51.4 and an adjusted P/E ratio for the last twelve months at 39.53. This could indicate that the market has high expectations for the company’s future earnings. Moreover, YPF is seen as a prominent player in the Oil, Gas & Consumable Fuels industry and has experienced a large price uptick over the last six months, with a 16.04% price total return.
For investors looking for more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/YPF, including insights on the company’s volatility, profitability predictions, and historical returns. To access these tips and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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This story originally appeared on Investing
