DEN - Citi sees oil prices stalling out; cuts Marathon Hess Continental and Coterra

Citi calls for a more selective stance on oil and gas producers as recession risks rise and the Fed determined to break the back of inflation, downgrading Marathon Oil (MRO), Hess (HES), Continental Resources (CLR) and Coterra Energy (CTRA) to Neutral from Buy. A short-term bounce in the stocks is possible but the potential to rise with crude oil has "diminished given the associated economic risk," according to Citi's Scott Gruber. But the analyst also suggests six oil names that could buck increasingly bearish sentiment, led by EOG Resources (NYSE:EOG) among the large-cap shale stocks on valuation, a firm cash return framework and an advantaged gas play in Dorado. Gruber says Ovintiv (OVV) and EQT Corp. (EQT) look attractive under a bounce scenario for the group, given free cash flow yield and cash return potential. Denbury (DEN), Occidental Petroleum (OXY) and California Resources Corp. (CRC) could benefit from a possible

For further details see:

Citi sees oil prices stalling out; cuts Marathon, Hess, Continental and Coterra