DB Slashes Energy Sector Profit Estimates As Oil Goes Down

Deutsche Bank analysts cut their 2017E Energy sector profits from $60 billion to $48 billion in line with their revised assumption that oil prices average $50-55/bbl in 2017 as against $60/bbl previously. David Bianco and colleagues said in their August 5 research piece titled “2017E S&P EPS cut from $130 to $128, 2017 end target remains 2350” that they lowered their estimate for cost of equity by 25bp at all sectors, except Financials, Con Dics, Telecom.

Energy & Financials contribute most of 2017E S&P EPS cut

Bianco and team point out that renewed oil price weakness indicates that rebalancing the global oil market will take longer and be bumpier than many anticipated. Gleaning through 1Q and 2Q results, the analysts highlight...