Jefferies sees mismatched risk-reward in Sable Offshore pipeline uncertainty

Jefferies reiterated a Buy rating and $19 price target on Sable Offshore (SOC), noting that the company’s December 23 announcement that he Pipeline and Hazardous Materials Safety Administration had issued an Emergency Special Permit approving the company’s restart plans for Lines 324 and 325 was followed by an NGO lawsuit with the 9th Circuit Court of Appeals. The firm said questions remain over what happens next, notably whether the case will result in an injunction. The uncertainty has led to volatility, but the firm believes there is a mismatched risk-reward, assuming federal support for the onshore option continues, the analyst tells investors in a research note, adding that we should know more over the next few weeks.