Raymond James has revised its outlook on Obsidian Energy (OBE, Financial), downgrading the company's rating from Strong Buy to Market Perform. This adjustment comes alongside a revised price target, now set at C$10, lowered from the previous C$14.
The decision reflects a broader concern about the current macroeconomic environment, which Raymond James believes will keep oil-weighted equities under pressure. The firm has adjusted its estimates and assumptions, particularly in relation to Obsidian Energy's capital spending and development expenses.
Raymond James anticipates that Obsidian's management may be required to reduce development capital spending below current market expectations, given the firm's updated oil market outlook. This strategic adjustment is seen as necessary to align with the prevailing economic conditions.
