YPF Upgraded to Buy as Argentina's Risk Profile and Company Fundamentals Improve
BofA Securities upgraded YPF S.A. (NYSE:YPF) to Buy from Neutral, raising its price target to $55 from $31, representing an approximate 40% upside potential. As a result, the company’s shares rose more than 2% pre-market today. The upgrade comes on the back of improving macroeconomic conditions in Argentina and YPF's advancing operational strategy.
Argentina’s country risk has significantly decreased, dropping from 2,000 basis points at the start of the year to around 750 by the end of November—the lowest level since 2019. This shift in macroeconomic conditions has contributed to YPF's stock rallying approximately 125% year-to-date.
On the company level, YPF continues to strengthen its position through strategic moves, including divestment of conventional assets and progress on its integrated LNG project. These developments, according to BofA, are expected to sustain the stock’s upward trajectory, aligning with both improved country dynamics and YPF’s focused execution on growth and operational efficiency.
| Symbol | Price | %chg |
|---|---|---|
| YPFD.BA | 49400 | 0 |
| XOM.MX | 2127 | 0 |
| 2222.SR | 28.7 | -1.05 |
| TGSU2.BA | 6600 | 0 |
YPF Raised to Buy at UBS, Shares Gain 8%
UBS analysts upgraded YPF (NYSE:YPF) to Buy rating from Neutral and increased their price target to $27 from $18. As a consequence, the company’s shares surged more than 8% intra-day on Thursday.
The analysts' optimism is based on signs that oil and gas operators like YPF might soon have the freedom to manage their operations more effectively. This freedom could lead to benefits such as better pricing policies for oil and fuels, reduced capital expenditures and operating costs, and a potential revaluation of the company's stock. These benefits are in addition to the expected increase in oil and natural gas production.
The analyst noted the "4x4" plan announced by the newly elected government and YPF's management, which aims to quadruple the company's value in the next four years. While acknowledging the challenging macroeconomic environment in Argentina, the analysts suggest that YPF could follow in the footsteps of Petrobras, which saw significant improvements between 2017 and 2022. Such improvements in efficiency, capital allocation, and reduced risk perception support the upgrade to a Buy rating.
