LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg upgraded exploration and development firm Cairn Energy from 'hold' to 'buy' on Friday, stating "significant progress" was yet to be reflected in its current share price.
Berenberg highlighted that India's finance minister, Nirmala Sitharaman, introduced a taxation laws amendment bill on Thursday, which will effectively withdraw retrospective tax demands made by the Indian government to Cairn in 2014.

The German bank stated the proposal would refund any amounts taken in payment by the government and return Cairn to the position it was in prior to the claim.

"In effect, this would mean a refund of circa $1.0bn-1.1bn. This is clearly a huge step forward for Cairn and significantly increases our confidence in a material, near-term payment from the Indian government," said Berenberg, which also increased its price target on the stock from 170.0p to 235.0p.

"The shares closed up by 26% on Thursday but, in our view, this undervalues the importance of this development and we think there is potential for an additional circa 50% upside in the near term. In addition, we reiterate the likelihood of material near-term cash returns to shareholders as and when any refund is received."

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