BofA Upgrades Equinor Stock on Gas Price Outlook and Yield Potential
Equinor ASA's () stock has received an upgrade from BofA Securities to Buy from Neutral, citing improved free cash flow prospects and higher natural gas price expectations. The firm raised its price target to NOK465 from NOK400, implying a free cash flow yield exceeding 8% at mid-cycle 2028 levels.
The upgraded rating is based on BofA's revised estimates, which include above-strip gas prices heading into winter with a baseline of EUR95 per megawatt-hour. This carries additional upside risks, and the firm projects Equinor will exit 2027 with over $10 billion in net cash.
The company's current free cash flow yield stands at 9%, while InvestingPro Tips highlight that Equinor is trading near its 52-week high following an impressive 93% year-to-date return. The acquisition of a 87.71% interest in the Lackawanna Energy Center, a 1,483-megawatt gas-fired power plant in Pennsylvania, for $940 million, and the purchase of a 17.4% stake in a Petroleum Exploration Licence in the Orange Basin offshore Namibia also underscore Equinor's strategic moves.