Hess cut Goldman after outperforming but still ‘a world-class growth story’ (NYSE:HES)

Hess (New York Stock Exchange:HES) -2.6% in Friday trading when Goldman Sachs downgraded the stock to Neutral from Buy with a $170 price target, on a valuation call after rising 75% over the past year and hitting an all-time high of $160.52 in the previous session.

Goldman’s Neil Mehta said the Hess (HES) outperformance is justified due to the exceptional increase in Guyana’s resource potential, the Liza phase 1 and 2 servicing and “the re-characterization of the oil curve, where Hess has more liquid leverage.” than typical US land E&Ps.”

Among large-cap energy names, Goldman prefers Exxon Mobil (XOM) for its international exposure, including Guyana with additional tailwinds around refining; ConocoPhillips (COP) by relative valuation; and select Canadian E&Ps such as Canadian Natural Resources (CNQ) and Suncor Energy (SU) for higher free cash flow generation through the cycle despite lower growth.

Shares of Hess (HES) gained over the past two days after reporting fourth-quarter earnings that more than doubled and easily beat analyst estimates.