Repsol YPF (Repsol) is in talks to divest its stake in YPF, after a failed IPO attempt in November 2008. The company has indicated that there are many potential buyers eyeing YPF. Meanwhile, our fundamental outlook for Repsol remains unchanged. Therefore, although the target price does not support a HOLD at current price levels, we maintain our HOLD rating for the company's common stock over our investment horizon of 6-12 months....

On 07 April 2009, the company announced the presence of an oil and gas in its Piracuca field, which was discovered in January 2009. Repsol YPF owns a 37% interest in the field with the rest owned by Petroleo Brasileiro S.A. (Petrobras). The field is estimated to hold 550 mn barrels of oil equivalent (mmboe). We believe the discovery will raise the company’s hydrocarbon production levels and thereby benefit its…

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Repsol YPF (Repsol) reported modest revenue growth in 3Q 08, driven by higher oil and gas prices. Although EBITDA margin remained broadly flat y-o-y, bottom-line contracted due to higher depreciation and interest costs. Lower average hydrocarbon prices in FY 2009 will lead to significant top-line contraction. Although FY 2010 will see resumption of revenue growth, it will still fall short of FY…