) to outperform from underperform.
Analyst Arjun Murti says he upgraded oil-and-gas explorer and producer Amerada Hess, but downgraded rival Kerr-McGee to underperform from in-line. He notes both Amerada and Kerr-McGee have badly underperformed the energy sector under almost any period imaginable. But he now believes the worst is behind Amerada as it has taken the tough steps necessary to provide a foundation for a brighter long-term future.
Murti says Kerr-McGee's deepwater-focused exploration strategy, on other hand, appears increasingly unviable given its weak core asset base and balance sheet. He doesn't think Kerr-McGee is likely to be a takeover target.