The 2016 All-Europe Research Team: Oil & Gas Exploration & Production, No. 1: Martinus (Martijn) Rats & team

Martinus (Martijn) Rats & team

Morgan Stanley

First-Place Appearances: 2

Total Appearances: 10

Team Debut: 2006

Martinus (Martijn) Rats, 43, leads his Morgan Stanley squad in London to a second consecutive top finish. “Their research is high quality, and the analysts have been helpful in our decision-making,” attests one fund manager. Over the past year, as part of their efforts to project potential outcomes for Europe’s energy sectors, Rats and his crew have periodically assessed the ongoing pressure on oil prices in light of the industry downturn in 1986. Among their conclusions: companies most likely to succeed in the current environment are those that reduce capital expenditures, institute aggressive cost savings and increase asset sales. “Their analyses brought what seemed like a crisis into a solid historical perspective,” recalls one grateful client. The team tracks some 25 names in this space, and one of their favorites is Norway-based oil and natural gas supplier Statoil. In February 2015 the researchers boosted their rating on the stock from neutral to overweight, largely on management’s cost-efficiency program. Although oil price declines continued to drag on performance, sending it down 23.7 percent by mid-January, to 103.40 Norwegian kroner, Statoil was leading its regional peers by 3.3 percentage points. The analysts continue to forecast outperformance, crediting strong cash flow, and peg the shares at Nkr150. Another top pick going forward is French integrated oil and gas major Total, which they like for the C-suite’s cost-savings efforts. At €50.50, the analysts’ price target represents a 35 percent premium to the shares’ value in mid-January.