Broker snap: Credit Suisse downgrades BP and upgrades Shell

Credit Suisse has cut its recommendation for BP from 'outperform' to 'neutral', on the back of the stock's valuation and 'lack of near-term momentum'."Three years after Macondo, BP remains in recovery mode in 2013, with positive momentum returning only in 2014+," the broker said on Friday."We do not believe that a Macondo resolution is enough to own the stock, since large portions of the costs have been paid/settled, leaving less to 'play for'."Production in 2013 is expected to fall by 6% due to the recent deal with Rosneft (which will buy its 50% stake in TNK-BP) and asset disposals.Furthermore, Credit Suisse said that BP's shares are no longer cheap on 2013-14 multiples, making a significant re-rating "unlikely".The broker has cut its target price for BP from 490p to 475p and said that it will revisit the investment case in 2013.Credit Suisse's preferred UK large-cap oil major is now Royal Dutch Shell, which it upgraded to 'outperform' in a separate report published Friday. The broker said that Shell's valuation is now more attractive, after the stock underperformed this year.The broker said: "Shell's story is well understood and lacks catalysts, but we believe that a safe dividend yield and predictable cashflow growth may be enough to make Shell outperform a lacklustre group in 2013."BC