Investment grade credit rating reinforced for now; upgrade to Neutral
concerns over the sustainability of the investment grade credit rating and we
therefore upgrade our recommendation to Neutral (from UW). We now
estimate a more modest ~$3bn shortfall against BBB metrics which would be
eliminated with a ~2.5% increase in commodity prices, although any
downward move in spot prices would see pressure re-emerge. Given an
estimated EV/EBITDA multiple of 7.2x on the Industrial business trades in
line with peers, we do not see compelling value and therefore resist turning
more positive at this juncture, although we expect a reduction in short interest
near-term. We increase our Dec'16 price target to £1.50/sh (from £1.30/sh).