JPMorgan Upgrades YPF and Expects Further Growth for the Argentine Energy Sector

In a client note, JPMorgan analysts raised their rating of Argentine oil company YPF. They said that the energy sector in South America has more room to grow as part of its "economic transformation".

The U.S. Investment Bank raised its YPF recommendations to "overweight" and from "neutral." It also more than doubled the price target from $25.00 to $59.50 for each American Depositary Receipt.

In 2024, YPF shares soared by more than 150% during a major rally of Argentine stocks as participants in the market celebrated the libertarian president Javier Milei's measures since he assumed office in December 2023.

The markets welcomed Milei's tough austerity campaign and deregulations to try and stabilize Argentina's public accounts as well as its economy, which is emerging from a painful economic recession.

JPMorgan analysts believe that even after the huge gains of last year, the oil and gas industry could continue to grow as it is crucial for the South American nation's "economic transform".

"We don't think it is too late for investors to invest in Argentina Oil and Gas... "In our opinion (it) will remain a very attractive space for equity investors by 2025," said the pair.

JPMorgan said that the YPF upgrade reflects YPF's strong industry position and the growth opportunities it offers as the company shifts from conventional fields to shale. It also reflects more favorable realised oil prices assumptions. Gabriel Araujo, Christina Fincher and Barbara Lewis edited the report.

(source: Reuters)