SAO PAULO (Reuters) - JPMorgan analysts upgraded their assessment of Argentine state-run oil firm YPF in a note to clients, saying the energy industry in the South American country has room for further growth as part of the country's "economic tranformation".
The U.S. investment bank raised its YPF recommendation to "overweight" from "neutral," and more than doubled its price target to $59.50 per American Depositary Receipt from $25.00 previously.
In 2024, YPF's shares soared more than 150% amid a major rally in Argentine stocks, as market participants celebrated measures implemented by libertarian President Javier Milei since he took office in December 2023.
Markets welcomed a tough austerity drive and deregulations implemented by Milei to try to stabilize public accounts and Argentina's economy as it emerges from a painful recession.
Even after the big gains last year, JPMorgan analysts said they believed the oil and gas sector could grow further as it was crucial to the South American country's "economic transformation".
"We do not think that it is too late to invest in Argentina oil and gas... In our opinion, (it) will continue to be a very interesting space for equity investors in 2025," they said.
The YPF upgrade reflects the company's strong position in the industry and growth opportunities as it shifts its focus from conventional fields to shale, JPMorgan added, as well as more favourable realised oil price assumptions.