MARKET TALK: UniCredit Downgrades BP To Hold Vs Buy

0841 GMT [Dow Jones] UniCredit downgrades BP (BP.LN) to hold from buy and cuts its target price to 420p from 690p to factor in estimate downgrades and the potential costs of the spill. UniCredit notes the setting-up of a $20B escrow account and the cancellation of the company's dividend. It reckons the stock's positive reaction to this news is attributable to a diminishing risk of an asset seizure in the US and lower refinancing needs and the positive reaction is expected to be short-lived. The bank says investor focus will shift to the risk of deferment/cancellation of start-ups, structural increase in costs and capex, falling returns and dividend cuts. It cuts its '10 adjusted EPS estimate by 0.9% to $1.05, '11 EPS cut by 3.5% to $1.08 and '12 EPS cut by 4.1% to $1.17. Shares +3.5% at 372p. (michele.maatouk@dowjones.com) Contact us in London. +44-20-7842-9464 Markettalk.eu@dowjones.com (END) Dow Jones Newswires June 18, 2010 04:41 ET (08:41 GMT)