DNB Carnegie cuts Var Energi to 'sell' on 'steep valuation'

** DNB Carnegie downgrades Norwegian oil and gas company Var Energi VAR.OL to "sell" from "hold", noting the stock's "steep valuation" leaves it exposed to negative surprises

** The brokerage expects third-quarter production to be below consensus due to planned and unplanned downtime at several key fields, including Balder and Castberg

** DNB says weaker third-quarter volumes will likely prompt a cut to full-year production guidance, reigniting investor concerns over long-term output and dividend capacity

** While anticipating strong free cash flow in the near term, the broker believes a potential extraordinary dividend is already well reflected in the current share price

** However, DNB raises PT by nearly 5% to NOK 46, noting the company trades above valuation levels seen during the 2022 energy crisis

** Out of 17 analysts covering the stock, 11 rate it "strong buy" or "buy", four rate it "hold", and two rate it "sell" or "strong sell" - LSEG data