Serica Energy initiated with a Buy at Redburn

Redburn analyst John de los Santos initiated coverage of Serica Energy with a Buy rating and 350 GBp price target. The “indiscriminate sell-off” in exploration and production shares this year implies a high degree of homogeneity within the sector, the analyst tells investors in a research note. However, the firm’s work shows that the companies are very different, with those that are best placed offering strong free cash flow generation and imminent production growth backed by robust resource portfolios. Redburn sees the recent weakness as an opportunity to buy the shares.