Financial Trading Blog
Stock of the day 16/08/2016 – Premier Oil PLC
It is hard to know how to feel about Premier Oil’s 2016 performance. While any increase in price is welcome, given the horrendous plunge it has seen since September 2014 (from £3.50 to 19p by the start of the New Year), the stock is so far away from where it was just 18 months ago that it is perhaps a mistake to celebrate any recovery without acknowledging the wider context of its fall. Nevertheless Premier Oil has made progress in the last few months, rising away from that early January all-time low to hit a 7 month high of 81p. It now sits at a current trading price of ... (IT-Finance.com, 15/08/2016).
(Source: IT-Finance.com 16/08/2016)
The main catalyst for Premier Oil’s recovery in 2016, beyond the general improvement in the oil price, has been its deal to buy $120 million in North Sea assets from E.On. The news initially saw the share suspended on 13th January, only to surge a whopping 82% when trading resumed on the 1st February. Any announcements related to the deal helped the stock climb further, rising over 20% at the end of April as shareholders gave the green light to the purchase, putting it on track to reach its aforementioned 7 month peak. The decision already seems to be paying off, the company revealing it had made a ‘significant’ discovery in the region at the start of August.
The stock could be in for another jump this week, with Premier Oil expected to announce a major £2.6 billion restructuring plan to deal with its wince-worthy amount of net debt. Analysts have argued that this news could see the stock double in price, and would easily overshadow its actual half year figures.
Premier Oil PLC has a consensus rating of ‘Hold’ with an average target price of £1.18.
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