BofA Upgrades Equinor Stock Rating to Buy Amid Higher Gas Price Outlook
BofA Securities has upgraded Equinor ASA's stock rating 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 current P/E ratio of Equinor stock is 12.09 with a PEG ratio of 0.58, suggesting attractive valuation relative to growth. InvestingPro data indicates the stock is undervalued, with its Fair Value analysis pointing to significant upside potential from current levels near $44.
BofA revised its estimates upward based on above-strip gas prices heading into winter, with a baseline of EUR95 per megawatt-hour that carries additional upside risks. The 2027 strip pricing for and leaves BofA's free cash flow estimate more than 150% above consensus forecasts.