OGX Petroleo & Gas Participacoes SA, the oil producer of billionaire Eike Batista, fell to a record after a top-ranked analyst cut the target price for the second time in a month.
OGX, based in Rio de Janeiro, dropped 5.1 percent to 1.48 ais at 12:17 p.m. in Sao Paulo, after earlier declining to 1.44 reais, the lowest since trading started in June 2008. OGX led losses and was the most-traded stock by volume on the benchmark Bovespa index, which declined 1.1 percent.
OGX’s recoverable oil assumptions may be lower than expected, Deutsche Bank AG’s Marcus Sequeira, the stock’s most accurate analyst in a Bloomberg Absolute Return Ranking (OGXP3), said in a note to clients today. The stock, which lost 89 percent in the past 12 months, is at risk of falling further, Sequeira said, after he cut the target price for the company to 80 centavos from 2 reais, having previously cut it on March 4.
“The main change to our numbers is a more conservative recoverable oil assumption,” Sequeira wrote. “The possibility of OGX’s asset value being lower than its gross debt position of close to $4 billion should not be ignored.”
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