Jefferies analysts upgrade some oil companies

Big oil company shares showed mixed results Monday after a group of Jefferies analysts shifted their ratings on some related stocks.

Analysts Iain Reid, Brendan Warn, Laura Loppacher, Matthew Lambourne and Daniela Almeida said in their note that major oils have been a poor investment in recent years, underperforming the S&P as a group by as much as 24 percent since the beginning of 2012. They said the performance in 2013 has again been poor, underperforming the S&P 500 by 11 percent thus far this year.

They say investors are troubled by commodity price outlooks, they do not believe company's growth forecasts and that capital exchange spending is getting too high and cash flow growth is too low to benefit shareholders.

The analysts said in a research note that oil companies' ability to achieve free cash flow growth will be a key determinant of their stock performance in the near future. They see four companies that stand out as able to grow their cash flow at rates better than average: BP PLC, Eni SpA and Petrobras Argentina SA.

Free cash flow is essentially the cash that it is able to generate after paying for its expenses. It is important because that is money that can be used for new products, acquisitions, dividend payments and more.

They said these companies are able to deliver higher-margin barrels, while also limiting their capital spending increases. They also are getting a boost from selling parts of their portfolio. The analysts upgraded their ratings on PetroBras to "Buy", downgraded Chevron Corp. to "Hold" and raised their price target on BP shares by 10 percent.

They kept "Buy" ratings on Total and Royal Dutch Shell.

Shares of BP rose 47 cents to $43.31 in afternoon trading. Eni shares climbed 75 cents to $43.98 and Petrobras shares fell 7 cents to $4.05.

Total SA shares rose $1.06, or 2.1 percent, to $51.16. Royal Dutch Shell shares added 42 cents to $65.87.