Western Midstream downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley downgraded Western Midstream to Equal Weight from Overweight with an unchanged price target of $42. In Q3, the energy group has lagged the market by 10% as softening oil prices, slowing inflation, and potential interest rate cuts “all present headwinds for performance,” the analyst tells investors in a research note. In this backdrop, the firm remains selective and continues to prefer defensive sub-sector positioning among midstream and majors. Morgan Stanley favors gas over oil in exploration and production. It made rating changes in the group after revisiting the setup across the North American energy sector.