Jun. 25 at 2:27 AM
Bank of America maintained its Underperform rating on Ecopetrol despite the election victory of Colombian President Abelardo De la Espriella, arguing that the stock has already priced in expectations of a more favorable regulatory environment for the oil sector. The bank reiterated its COP 1,900 price target, implying roughly 28% downside from recent levels.
BofA noted that Ecopetrol shares have rallied about 70% over the past 12 months, driven largely by expectations of political change and improved industry policies. The stock now trades at around 4.5x EV/EBITDA, a premium to many Latin American peers, leading analysts to believe that further multiple expansion will be difficult without tangible operational improvements.
While the new administration is expected to support oil and gas development through measures such as renewed exploration contracts, potential fracking projects, and reduced regulatory restrictions.
$EC $BAC