Cairn Energy plc: Target share price dropped

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Category: Commodities

Published on Wednesday, 03 August 2011 10:38

Written by Will Peters

RBS drop the target share price on Cairn Energy after taking a look at the company's Greenland operations.

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Cairn Energy plc (LON:CNE) shares are 5% lower today at 334.90 (11:20 AM in London).

This morning we note that equity analysts at RBS have dropped their target share price on Cairn Energy to 440 from 510.

The reason lies with recent exploration activity in Greenland:

"The LF7-1 well offshore Greenland has been unsuccessful, although the result does provide further evidence of an oil-prone source rock offshore Greenland. Removing the risked 25p upside we were carrying for this well and incorporating recent updates, we revise our TP to 440p (from 510p) but remain at Buy," says analyst Phil Corbett at RBS.

Looking at the markets this afternoon we see that the FTSE 100 remains at suppressed levels.

Concerns over slowing growth and the threat of a cut in credit rating spooked US investors last night, sending equities down sharply. This in turn drove Asian markets firmly lower and set the tone for a dismal start to trading in London.

Morning losses have been broad-based, with very few blue chips achieving positive status.

Top of the leaderboard was Asia-facing bank Standard Chartered, up 34p at 1,588p after reporting record half-year numbers. Reported pretax profit was $3.636bn for the half-year to end-June, up 17% from $3.116bn in the prior year period. Interim dividend per share was increased 10% to 24.75 cents per share.

Elsewhere in the sector, the news was gloomy, with Royal Bank of Scotland and Lloyds, who report results over the next two days, sliding 0.46p at 32.93p and 0.485p at 39.46p, respectively, while Barclays dropped 1.7p at 215.05p.