We are upgrading PetroChina (PTR) ADRs to Outperform from Neutral, reflecting the company’s leverage to the fast-growing Chinese market and the turnaround in commodity prices. Being one of the two Chinese integrated oil companies, PetroChina is well-positioned to capitalize on these favorable trends.
We also like the company’s recent foray in the oil sands business through its $1.8 billion acquisition of majority stakes in two Canadian projects. Attractive growth prospects in the downstream and natural gas sectors are other positives in the PetroChina story.
Despite some near-to-medium term concerns that include rising costs, a downstream-centric asset portfolio and special levies on domestic crude oil sales, the company’s long-term outlook is compelling.Zacks Investment Research
