LINN Energy downgraded to Neutral from Buy at Goldman
Goldman downgraded LINN Energy given balanced risk/reward. Price target remains $34.
LinnCo downgraded to Neutral from Buy at Goldman
Goldman downgraded LinnCo given balanced risk/reward. Price target remains $35.
Now that LINE says SEC inquiry still ongoing and this is 1 of the Catalyst that GS says was a bit overdone that drove their upgrade of LINN weeks ago and now their downgrade was based on the Catalyst being removed. I guess we can now expect another upgrade from GS in the near future. All makes alot of sense.
Think if this -- $34 price target remains, 8% above current price, almost 10% yield on today's price. Total return going forward is about 18%. Where else can you get a solid 18% with so little risk...And that's a downgrade???Give me a break.
Seems off Goldman would come out with this change before the call.
Translation really is they paid to much for BRY. Which sadly I must agree with at this point.
This deal with the ability to put capital towards higher margin oil with little e and big P investments should 'solve' the concerns around 'capital efficiency'.
The organic growth alternative would have required additional investment in natural gas volumes. Given pricing the shorts would have been chanting capital efficiency the whole time.
It will be a while before LINE and BRY are integrated. Just as importantly analysts once again feel comfortable with base or core cash flow. At that point LINE should be back in the acquisition and integration of c-corp business again.
$35 is probably a fair price now given how much will be paid for BRY. Those BRY owners would be crazy not to jump at this. But with lower risk comes a very certain distribution. Certainly the lowest risk 10% distibution available. By a great deal.
I see Barrons couldn't wait to do its cut-and-paste reporting of the G-S rating change. Can't believe people get paid for that kind of work.
The CC this AM should leave G-S looking totally stupid for jumping ahead of it. I expect Linn to put up some provocative projections for 2012 along with distribution boost. If they don't, I'll be quite disappointed.