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On Monday, Jefferies made an adjustment to the stock price target for Kosmos Energy (NYSE:), reducing it to $7.30 from the previous $7.70. Despite the lower price target, the firm maintained a Buy rating on the shares.
Kosmos Energy is recognized for its unique position as an independent exploration and production company partnered in an international oil company-operated floating liquefied (FLNG (OL:)) project.
The Tortue Phase 1 development has experienced delays and higher costs than initially anticipated, yet the anticipated start-up is seen as a pivotal step that could reduce the risks associated with the potential for Phase 2 of the project.
Jefferies refers to a valuation comparison of Kosmos Energy with its gas-weighted exploration and production peers to maintain a perspective on the company’s valuation potential. The firm has shifted to a 4.0x enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple in its price target methodology. This change is intended to balance some effects of increased operational expenses and capital expenditure guidance in their estimates.
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This story originally appeared on Investing
