OGX Petroleo & Gas Participacoes SA’s shares may post an almost three-fold gain in the next 12 months after a plunge last week sank the stock to “appealing” levels, Banco BTG Pactual said.
OGX, the oil company controlled by billionaire Eike Batista, may reach 17.63 reais in the next 12 months, BTG Pactual’s analyst Gustavo Gattass wrote in a note to clients today. OGX slid 2.4 percent to 6.13 reais at the close of trading in Sao Paulo after earlier rising 4.6 percent. The stock is up 11.5 percent this week. The benchmark Bovespa index gained 0.5 percent today.
The stock plunged 41 percent last week, the biggest slump on record, after the company cut the production target at each of its first two wells by as much as 75 percent.
“OGX has enough cash to support its business,” Gattass wrote. “We believe that from the selloff and in spite of the new outlook there has come an appealing value.”