24/7 Wall St. » COP

24/7 Wall St. Top Analyst Calls of the Week (AONE, ALU, AMSC, NLY, AAPL, CSCO, COH, CSTR, COP, DLR, IBM, LF, MMM, M, OPEN, POST, SIRI, SOHU, TRLG, ZOLT)

Administrator — Sat, 11 Feb 2012 15:53:52 +0000

This last week was very busy, and Friday’s disappointing trading day skewed many research reports. Each morning we track analyst upgrades and downgrades and over the weekend we review each to see which stood out as highly insightful, or which were great money-makers for investors. Of course, there are some really bad calls that come about too. For better or worse, these make up the 24/7 Wall St. Top Analyst Calls of the Week.

This last weeks most featured reports were in shares of the following: A123 Systems, Inc. (NASDAQ: AONE); Alcatel-Lucent S.A. (NYSE: ALU); American Superconductor Corporation (NASDAQ: AMSC); Annaly Capital Management Inc. (NYSE: NLY); Apple Inc. (NASDAQ: AAPL); Cisco Systems, Inc. (NASDAQ: CSCO); Coach, Inc. (NYSE: COH); Coinstar, Inc. (NASDAQ: CSTR); ConocoPhillips (NYSE: COP); Digital Realty Trust, Inc. (NYSE: DLR); International Business Machines Corporation (NYSE: IBM); Leapfrog Enterprises Inc. (NYSE: LF); 3M Co. (NYSE: MMM); Macy’s Inc. (NYSE: M); OpenTable Inc. (NASDAQ: OPEN); Post Holdings Inc. (NYSE: POST); Sirius XM Radio Inc. (NASDAQ: SIRI); Sohu.com Inc. (NASDAQ: SOHU); True Religion Apparel, Inc. (NASDAQ: TRLG); and Zoltek Companies, Inc. (NASDAQ: ZOLT).

We have summarized each call and either added in trading color or provided a link to more data on each.

A123 Systems, Inc. (NASDAQ: AONE) was a highly influential call from a firm not very well known. The battery maker was downgraded on fears that Fiskar will not be able to keep buying from them. This fell 23% after it was cut to Sell at Wunderlich, but the price target was the real kicker: $0.50. Ouch.

Alcatel-Lucent S.A. (NYSE: ALU) was sure a wrong-way call of the week. The perpetually turning-around communications equipment maker was downgraded to ‘Sell’ at S&P Equity Research ahead of earnings and the stock closed up almost 13% at $2.19 on Friday.

American Superconductor Corporation (NASDAQ: AMSC) was inadvertently a really bad call because it got caught up in a weak stock market day and got caught on a day when alternative energy players took it on the chin. This one was raised to ‘Buy’ at Citigroup on Friday and closed don over 8% at $5.11 after opening at $5.36 on the day. Oops.

Annaly Capital Management Inc. (NYSE: NLY) had a rough week based in part on a mortgage foreclosure settlement. We expect the debate to continue over the real impact, but this high dividend yield mortgage REIT was downgraded to ‘Market Perform’ and the price target was cut to $16.00 from $17.50 by Friedman, Billings & Ramsey this last week.

Apple Inc. (NASDAQ: AAPL) keeps hitting new all-time highs each day. Apparently it is going to keep doing that for quite some time if Canaccord Genuity gets its way. That firm listed many reasons to raise it price target to $665 this last week.

Cisco Systems, Inc. (NASDAQ: CSCO) was better than what we feel the street gave it credit for on earnings. Credit Suisse only reiterated an ‘Outperform’ rating ahead of earnings, but what stood out was the $26.00 price target because that is about $4.50 higher than the consensus price target and that is also close to where the stock petered out in 2010.

Coach, Inc. (NYSE: COH) may be gutsy and may be an afterthought. It was recently given a strong tout by CNBC’s Jim Cramer as his luxury stock of choice, but on Friday it was raised started as ‘Buy’ with a target of $85 at Citigroup. This came on a day when the stock hit an all time high and closed at $74.54.

Coinstar, Inc. (NASDAQ: CSTR) is already up big over the last week, but we have never really considered it just as a value stock. Don’t tell that Zacks… On Friday it was named as Zacks’ Value Stock of the Day.

Filed under: 24/7 Wall St. Wire, Analyst Calls, The Week Tagged: AAPL, ALU, AMSC, AONE, COH, COP, CSCO, CSTR, DLR, IBM, LF, M, MMM, NLY, OPEN, POST, SIRI, SOHU, TRLG, ZOLT

24/7 Wall St. Closing Bell (COP, GILD, AMSC, MA, COH, LNKD, ATVI, CPST, GPRE, KONA, TRLG, LGF, MOVE, NBL, PCYC, ALU, FLIR, RUTH, FSLR, CIE, TBAC, RPXC, AMRS)

Paul Ausick — Fri, 10 Feb 2012 21:07:37 +0000

All three major US stock indexes opened lower this morning and the day was mostly a gentle slide for the rest of the trading session. The failed Greek debt deal weighed on futures this morning and nothing came along during the day to lift anyone’s spirits. US consumer sentiment fell slightly in January, the US trade deficit grew, and the federal budget deficit shrank, but now by enough to ignite buyers. Remarks by Fed chairman Bernanke on how to fix the housing mess didn’t offer anything new either. With equities and commodities all lower, the dollar index rose 0.523% today to 79.140. Crude oil is down today, with WTI down -1.04% at $98.80/barrel and Brent down -1.05% at $117.35/barrel. Gold settled down -0.9% at $1,725.30/ounce.

The unofficial closing bells put the DJIA down more than 89 points to 12,801.23 (-0.69%), the NASDAQ fell more than 23 points (-0.8%) to 2,903.88, and the S&P 500 fell -0.69% or more than 9 points to 1,342.64.

There were several analyst upgrades and downgrades today, including ConocoPhillips (NYSE: COP) raised to ‘buy’ at Deutsche Bank; Gilead Sciences Inc. (NASDAQ: GILD) started as ‘overweight’ at both Barclays and Morgan Stanley; American Superconductor Corp. (NASDAQ: AMSC) raised to ‘buy’ at Goldman Sachs; Mastercard Inc. (NYSE: MA) reiterated as ‘buy’ and target price raised to $450 at Argus; and Coach Inc. (NYSE: COH) started as ‘buy’ at Citigroup.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: LinkedIn Corp. (NASDAQ: LNKD) is up more than 18% at $90.44 (more coverage here); Activision Blizzard Inc. (NASDAQ: ATVI) is down -2.84% at $12.30; Capstone Turbine Corp. (NASDAQ: CPST) is down -9.8% at $1.26; Green Plains Renewable Energy Inc. (NASDAQ: GPRE) is down -3.5% at $11.20; Kona Grill Inc. (NASDAQ: KONA) is down -3.8% at $6.05; True Religion Apparel Inc. (NASDAQ: TRLG) is down more than -27% at $26.75; Lions Gate Entertainment Corp. (NYSE: LGF) is up 6.5% at $11.73 after posting a new 52-week high of $12.24 earlier today; Move Inc. (NASDAQ: MOVE) is up 14% at $8.65; Noble Energy Inc. (NYSE: NBL) is down -2.7% at $100.70; Pharmacyclics Inc. (NASDAQ: PCYC) is up more than 14% at $22.65 after posting a new 52-week high of $23.57 earlier today; Alcatel Lucent (NYSE: ALU) is up more than 13% at $2.2 (more coverage here); FLIR Systems Inc. (NASDAQ: FLIR) is down -3.3% at $24.90; and Ruth’s Hospitality Group Inc. (NASDAQ: RUTH) is up 3.2% at $6.19.

Other standouts from today include the following stocks:

First Solar Inc. (NASDAQ: FSLR) is down more than -10% at $43.94. The thin-film solar panel maker is having trouble meeting a financing requirement related to the sale of one of its solar farms to Exelon Corp. (NYSE: EXC). More coverage here.

Tandy Brands Accessories Inc. (NASDAQ: TBAC) is up nearly 71% at $1.77. The clothing accessories maker announced strong earnings and two new brand licensing agreements today.

Cobalt International Energy Inc. (NYSE: CIE) is up 35% at $32.27 after posting a new 52-week high of $36.51 earlier today. The independent oil & gas producer reported significantly better-than-expected flows from a test well offshore of Angola.

RPX Corp. (NASDAQ: RPXC) is up more than 11% at $19.21. The patent risk management company has a contract with Alcatel Lucent that could be very valuable as the larger company begins more aggressively to license its 29,000 patents.

Amyris Inc. (NASDAQ: AMRS) is down more than -28% at $6.95 after posting a new 52-week low of $6.85 earlier today. The biofuel maker’s stock was downgraded following a negative outlook from the company for 2012.

Stay tuned for Monday. We have noted the following events on the schedule (all times Eastern):

11:30 a.m. – 3- and 6-month Treasury bill auctions

Have a great weekend.

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: ALU, AMRS, AMSC, ATVI, CIE, COH, COP, CPST, FLIR, FSLR, GILD, GPRE, KONA, LGF, LNKD, MA, MOVE, NBL, PCYC, RPXC, RUTH, TBAC, TRLG

Top Analyst Upgrades & Downgrades (ALTR, AMSC, BIIB, CELG, COH, CSTR, COP, FSLR, GILD, HAIN, MA, RF, TRLG)

Administrator — Fri, 10 Feb 2012 13:23:06 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Friday morning.

Altera Corporation (NASDAQ: ALTR) Cut to Underperform as Bear of the Day at Zacks.
American Superconductor Corporation (NASDAQ: AMSC) Raised to Buy at Citigroup.
Biogen Idec Inc. (NASDAQ: BIIB) Started as Overweight at Morgan Stanley.
Celgene Corporation (NASDAQ: CELG) Started as Overweight at Morgan Stanley.
Coach, Inc. (NYSE: COH) Started as Buy at Citigroup.
Coinstar, Inc. (NASDAQ: CSTR) named as Value stock of the day at Zacks.
ConocoPhillips (NYSE: COP) Raised to Buy at Deutsche Bank.
First Solar, Inc. (NASDAQ: FSLR) Cut to Neutral at Collins Stewart.
Gilead Sciences Inc. (NASDAQ: GILD) Started as Overweight at Barclays; Started as Overweight at Morgan Stanley.
Hain Celestial Group (NASDAQ: HAIN) maintained Outperform and named as Bull of the Day at Zacks.
MasterCard Inc. (NYSE: MA) Reiterated Buy and raised target to $450 at Argus.
Regions Financial Corporation (NYSE: RF) Raised to Outperform at Credit Suisse.
True Religion Apparel, Inc. (NASDAQ: TRLG) Cut to Hold at Brean Murray.

If you enjoyed the top analyst calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: ALTR, AMSC, BIIB, CELG, COH, COP, CSTR, FSLR, GILD, HAIN, MA, RF, TRLG

24/7 Wall St. Closing Bell (AAPL, GS, SBUX, ORCL, RF, ZNGA, AMD, ALTR, YHOO, COP, PX, WLP, LCC, XRX, ILMN, RBCN, INCB, GNOM, NUVA)

Paul Ausick — Wed, 25 Jan 2012 21:08:16 +0000

Markets opened mixed this morning, with the DJIA and S&P 500 opening lower and the Nasdaq Composite opening higher. The Nasdaq was getting a big push from the very strong earnings report out of Apple Inc. (NASDAQ: AAPL). The FOMC’s announcement that interest rates would remain near zero until late 2014 started a Fed rally and pushed the S&P into positive territory where they spent the rest of the day. Oil prices were lower this morning, but the weekly status report from the US Energy Information Administration led crude prices to a gain. WTI crude oil is up 0.72% at $99.66/barrel and Brent crude is up 0.16% at $110.21. Gold closed up 2.61% at $1,707.90.

The unofficial closing bells put the DJIA up more than 83 points to 12,758.85 (0.66%), the NASDAQ rose nearly 32 points (1.14%) to 2,818.31, and the S&P 500 rose 0.87% or more than 11 points to 1,326.06.

There were several analyst upgrades and downgrades today, including Goldman Sachs Group Inc. (NYSE: GS) cut to ‘neutral’ at JPMorgan; Starbucks Corp. (NASDAQ: SBUX) raised to ‘outperform’ at Oppenheimer; Oracle Corp. (NASDAQ: ORCL) cut to ‘neutral’ at Macquarie; and Regions Financial (NYSE: RF) raised to ‘outperform’ at RBC Capital and cut to ‘neutral’ at BofA/Merrill Lynch. Znyga Inc. (NASDAQ: ZNGA) gets starting calls from four brokers: ‘overweight’ at Barclays and JPMorgan; ‘buy’ at Goldman Sachs; and ‘neutral’ at BofA/Merrill Lynch.

Earnings reports since markets closed on last night have led to some price changes as of the last half hour of trading today: Apple is up 6.4% at $447.17, after posting a new 52-week high this morning of $454.45; Advanced Micro Devices Inc. (NYSE: AMD) is up nearly 3% at $6.72; Altera Corp. (NASDAQ: ALTR) is up 1% at $40.54; Yahoo! Inc. (NASDAQ: YHOO) is down -0.6% at $15.60; ConocoPhillips (NYSE: COP) is down -0.9% at $70.01; Praxair Inc. (NYSE: PX) is down -2.8% at $106.05; Wellpoint Inc. (NYSE: WLP) is down -4.9% at $66.01; US Airways Group Inc. (NYSE: LCC) is up more than 18% at $7.59; and Xerox Corp. (NYSE: XRX) is down nearly -10% at $7.81.

Other standouts from today include the following stocks:

Illumina Inc. (NASDAQ: ILMN) is up more than 46% at $55.16. The genetic testing instrument maker is the target of a $5.7 billion hostile takeover offer from Roche Holdings AG.

Rubicon Technologies Inc. (NASDAQ: RBCN) is down nearly -12% at $10.66. The LED lighting maker was downgraded from ‘buy’ to ‘hold’ at Needham yesterday on low demand.

Indiana Community Bancorp (NASDAQ: INCB) is up about 44% at $20.90 after posting a new 52-week high of $21.34 earlier. The bank holding company has agreed to be acquired by Old National Bancorp (NYSE: ONB) in an all-stock transaction.

Complete Genomics Inc. (NASDAQ: GNOM) is up 19% to $2.98. The DNA-sequencing company is getting a boost from the hostile takeover bid for Illumina.

NuVasive Inc. (NASDAQ: NUVA) is up about 19% at $16.31. The medical device maker had its shares stopped today following a report that it would not receive an injunction against selling a disputed product.

Stay tuned for Thursday. We have noted the following events on the schedule (all times Eastern):

8:30 a.m. – Durable goods orders
8:30 a.m. – New claims for unemployment benefits
10:00 a.m. – New home sales
10:30 a.m. – EIA weekly natural gas storage report
4:30 p.m. – Fed balance sheet and money supply reports

Paul Ausick

Filed under: HI/LOW, Market Close, The Day Tagged: AAPL, ALTR, AMD, COP, GNOM, GS, ILMN, INCB, LCC, NUVA, ORCL, PX, RBCN, RF, SBUX, WLP, XRX, YHOO, ZNGA

24/7 Wall St. Closing Bell (COP, SIRI, GOOG, PG, AMGN, HAL, TWIN, PETS, MFN, GDP, CBRX, SR, RIMG)

Paul Ausick — Mon, 23 Jan 2012 21:08:11 +0000

Equity markets opened slightly higher this morning but trailed off to negative territory in the late morning. By late afternoon, the NASDAQ composite and the S&P 500 were flirting with a positive result. Continuing talks between the Greek government and the country’s bondholders have not made any progress, and the imposition of an embargo on Iranian oil and other sanctions have been approved by the European Union. Some in Iran are making more threats to close the Strait of Hormuz, which has sent crude prices higher today. WTI crude is up 1.58% at $99.88/barrel and Brent crude is up 0.91% at $110.86/barrel. Gold has risen to $1,672.60/ounce, up 0.75% on the day.

The unofficial closing bells put the DJIA down nearly 12 points to 12,708.82 (-0.09%), the NASDAQ fell more than 2 points (-0.09%) to 2,784.17, and the S&P 500 rose 0.05% or less than 1 point to 1,316.00.

There were several analyst upgrades and downgrades today, including ConocoPhillips (NYSE: COP) cut to ‘sell’ at UBS; Sirius XM Radion Inc. (NASDAQ: SIRI) cut to ‘equal weight at Morgan Stanely; Google Inc. (NASDAQ: GOOG) reiterated as ‘buy’ with a $730 target price at Argus; Proctor & Gamble (NYSE: PG) cut to ‘hold’ at Stifel Nicolaus; and Amgen Inc. (NASDAQ: AMGN) cut to ‘neutral’ at JPMorgan.

Earnings reports since markets closed on Friday have led to some price changes as of the last half hour of trading today: Halliburton Co. (NYSE: HAL) is up XX% at $XX; Twin Disc Inc. (NASDAQ: TWIN) is down -XX% at $XX; and PetsMed Express Inc. (NASDAQ: PETS) is up XX% at $XX. We also have a rundown of the 11 stocks included in the DJIA that will be reporting earnings this week.

Other standouts from today include the following stocks:

Minefinders Corp. Ltd. (AMEX: MFN) is up nearly 23% at $13.94. The Canadian silver miner is being acquired by Pan American Silver Corp. (NASDAQ: PAAS) for CDN$1.5 billion.

Goodrich Petroleum Corp. (NYSE: GDP) is up more than 12% at $15.76. The natural gas producer is the biggest gainer among natural gas drillers following an announcement from Chesapeake Energy Corp. (NYSE: CHK) that it was reducing production this year.

Columbia Laboratories Inc. (NASDAQ: CBRX) is down more than -54% at $0.72 after posting a new 52-week low of $0.64 earlier today. The drug company’s progesterone vaginal gel was not approved by a committee of the US FDA.

The Standard Register Co. (NYSE: SR) is down nearly -14% at $2.18, a new 52-week low. The printing and services company announced that it would reduce its workforce by 15% and take other measures in a restructuring of the company. Layoffs would affect about 390 workers.

Rimage Corp. (NASDAQ: RIMG) is down nearly -11% at $11.77. The digital publishing provider lowered its fourth-quarter earnings and revenue forecasts.

Stay tuned for Tuesday. The Federal Reserve’s open market committee meeting starts tomorrow, with a press conference with Fed chairman Ben Bernancke following at 2:30 p.m. ET. President Barack Obama delivers his state of the union address at 9:00 P.M ET. We have noted the following events on the schedule (all times Eastern):

11:30 a.m. – 4-week Treasury bill auction
1:00 p.m. – 2-year Treasury note auction

Paul Ausick

Filed under: HI/LOW, Market Close, The Day Tagged: AMGN, CBRX, COP, GDP, GOOG, HAL, MFN, PETS, PG, RIMG, SIRI, SR, TWIN

Top Analyst Upgrades & Downgrades (AMGN, CMA, COP, GOOG, JIVE, JCI, NUVA, PG, PHM, RIMM, SN, SIRI, VPHM)

Administrator — Mon, 23 Jan 2012 13:28:19 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Monday morning.

Amgen Corporation (NASDAQ: AMGN) Cut to Neutral at JPMorgan.
Comerica Inc. (NYSE: CMA) Cut to Neutral at Susquehanna.
ConocoPhillips (NYSE: COP) Cut to Sell at UBS.
Google Inc. (NASDAQ: GOOG) Reiterated Buy with $730 price target at Argus.
Jive Software, Inc. (NASDAQ: JIVE) Started as Buy at Citigroup; Started as Neutral at UBS; Started as Outperform at Wells Fargo; Started as Overweight at Morgan Stanley.
Johnson Controls Inc. (NYSE: JCI) Cut to Equal Weight at Barclays.
NuVasive, Inc. (NASDAQ: NUVA) Raised to Buy at Canaccord Genuity.
Procter & Gamble (NYSE: PG) Cut to Hold at Stifel Nicolaus.
PulteGroup (NYSE: PHM) Cut to Equalweight at Barclays.
Research in Motion Ltd. (NASDAQ: RIMM) Raised to Hold from Sell at Deutsche Bank; Reiterated as Hold at Canaccord Genuity.
Sanchez Energy Corporation (NYSE: SN) Started as Buy at Canaccord Genuity; Started as Buy at Stifel Nicolaus.
SIRIUS XM Radio Inc. (NASDAQ: SIRI) Cut to Equal Weight at Morgan Stanley.
ViroPharma Incorporated (NASDAQ: VPHM) Cut to Neutral at JPMorgan.

JON C. OGG

Filed under: Analyst Calls Tagged: AMGN, CMA, COP, GOOG, JCI, JIVE, NUVA, PG, PHM, RIMM, SIRI, SN, VPHM

Refining Sector Woes Going From Challenging To Worse (TSO, VLO, MPC, WNR, CVI, XOM, CVX, COP, BP)

Paul Ausick — Thu, 05 Jan 2012 17:45:21 +0000

One of the largest crude oil refiners in the US, Tesoro Corp. (NYSE: TSO), this morning lowered its earnings guidance for the fourth quarter, projecting a loss of -$0.55 to -$0.80. The consensus estimate for Tesoro had been for EPS of $0.70. Shares are down about -7% in the first half hour of trading, and other independent refiners like Valero Energy Corp. (NYSE: VLO), Marathon Petroleum Corp. (NYSE: MPC), Western Refining Inc. (NYSE: WNR), and CVR Energy Inc. (NYSE: CVI) are also getting taken down. Major integrated companies like Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), ConocoPhillips (NYSE: COP), and BP plc (NYSE: BP) are also down, but by very much less.

In its announcement Tesoro pointed out the obvious problem:

The discount of WTI to Brent during the fourth quarter narrowed by $18/bbl, dropping from $26/bbl at the end of September to $8/bbl at the end of December. This market price movement impacts fourth quarter results in two ways. First, by reducing benchmark margins at our refineries that run WTI-priced barrels and, second, by reducing the margin on long-haul foreign crude oil barrels indexed to WTI.

Every independent refiner will get hit by this to some degree and we’ve taken a look at what the impact on each might be.

Valero is expected to post EPS of $0.84 in the fourth quarter. The country’s largest refiner owns 16 refineries with a daily throughput volume of 3 million barrels. It is also one of the world’s largest makers of ethanol. Half the refineries are located along the US Gulf Coast, and in the company’s latest investor presentation, WTI margins had fallen from around $26/barrel to around $15/barrel. The company’s Brent margins have stayed relatively flat, at around $10-$11/barrel. To counteract that somewhat, Valero expects to refine about 75,000 barrels/day from the Eagle Ford shale play in the first quarter of 2012. The company is also planning to expand its distillate production to capture the higher margins available from diesel fuel, especially in Europe. Valero hasn’t said anything yet about its fourth quarter earnings, but the company’s stock is down nearly -4% on Tesoro’s report. If Valero revises its earnings estimate — which is likely — another drop of at least that amount is likely.

Marathon completed its spin-off from parent Marathon Oil Corp. (NYSE: MRO) last June. The company owns six refineries and 51% of the company’s crude supply comes from either the US or Canada. The company’s WTI-Brent differential was nearly $23/barrel in the third quarter of this year compared with less than $3.50/barrel in 2010. No data is available for the fourth quarter, but it’s difficult to see how Marathon can avoid getting caught in the same bind as Tesoro and Valero.

Western Refining owns two refineries with a total throughput of 151,000 barrels/day. The company’s operating margin through the first three quarters of 2011 is around $20/barrel. All of Western’s crude is domestically sourced and priced as WTI. This is a nice advantage when Brent pricing is more than $25/barrel higher, but as the differential narrows, Western has to come up with some other way to make profits. This company could get stung badly on WTI pricing.

CVR Energy owns two refineries with a combined throughput of 185,000 barrels/day. Both are located in the Midwest and about 75% of the feedstock is domestically sourced WTI. CVR gets some portion of its feedstock from the Bakken area, which gives the company an additional break on crude pricing because Bakken crude trades at a small discount to WTI. Rising WTI prices will certainly hurt margins for CVR, but probably not as badly as the narrower differential will hurt other refiners.

One last word about Conoco, which is planning to spin-off its refining operations into a separate company. The spin-off was set to happen by mid-2012, but unless refining margins return to what they were last summer, Conoco might have a hard time convincing investors that they’re getting a good deal from the split.

Paul Ausick

Filed under: Earnings Warning, Oil & Gas Tagged: BP, COP, CVI, CVX, MPC, TSO, VLO, WNR, XOM

New Crude Oil Pipeline System to be Built in Gulf of Mexico (EPD, GEL, APC, APA, XOM, E, PBR, PXP, BP, MRO, RDS-A, CVX, COP)

Paul Ausick — Wed, 04 Jan 2012 14:57:26 +0000

Two pipeline companies have agreed to a 50-50 joint venture to build a new 149-mile offshore gathering system in the Gulf of Mexico. Enterprise Products Partners L.P. (NYSE: EPD) and Genesis Energy LP (NYSE: GEL) will build the system and Enterprise will be the operator.

The new gathering system will serve the Keathley Canyon area and serve producers Anadarko Petroleum Co. (NYSE: APC), Apache Corp. (NYSE: APA), Exxon Mobil Corp. (NYSE: XOM), Eni SpA (NYSE: E), Petroleo Brasileiro (NYSE: PBR), and Plains Exploration & Production Co. (NYSE: PXP). Keathley Canyon was the site of the first major oil discovery in the US Gulf once drilling was reopened following the Macondo well explosion in April 2010 that killed 11 workers on a rig operated by BP plc (NYSE: BP). Exxon, which made the discovery, has estimated the resource at 700 million barrels.

The joint venture, called the Southeast Keathley Canyon Pipeline Co. LLC (SEKCO), plans to build an 18-inch pipeline to transport 115,000 barrels/day of crude to a floating production platform and connect to Enterprise’s Poseidon pipeline system to move the oil onshore. The southeast portion of Keathley Canyon is estimated to hold about 300 million barrels of reserves.

In related transactions, Genesis is acquiring a 28% stake in the Poseidon pipeline system from Marathon Oil Corp. (NYSE: MRO), as well as a 29% stake in the Odyssey pipeline system which is majority owned and operated by Royal Dutch Shell plc (NYSE: RDS-A) and a 23% stake in the Eugene Island pipeline system owned by a group including Exxon, Shell, Chevron Corp. (NYSE: CVX), and ConocoPhillips (NYSE: COP). Genesis is paying about $206 million for these three acquisitions, which includes about $26 million for the value of the crude already in the pipelines. The company used its revolving credit facility to finance the purchases.

The SEKCO pipeline system is expected to be in service by mid-2014.

Paul Ausick

Filed under: Oil & Gas Tagged: APA, APC, BP, COP, CVX, E, EPD, GEL, MRO, PBR, PXP, RDS-A, XOM

Top Oil & Gas Stock Picks for 2012 (XOM, CVX, COP, RRC, TSO, PXD, APC, CHK, APA, OXY)

Paul Ausick — Wed, 28 Dec 2011 19:08:32 +0000

Crude oil prices have risen this year, although they have been tapering off in the past couple of months. Pump prices have been driven by the price differential between Brent crude and WTI crude, and integrated oil companies that could take advantage of the differential made substantial margins on refining WTI crude and selling the products as if higher priced Brent were the refineries’ feedstock. The differential reached more than $25/barrel earlier this year, but has fallen back to about $8-$9/barrel currently.

The fortunes of any oil & gas producer depends on the price of the commodity, and crude prices in the US have been rising, while natural gas prices have been no better than flat for the year. And while crude prices could rise to an average of more than $105/barrel in 2012, natural gas prices are not expected to rise much next year as abundant supplies are likely to increase even more.

We’ve looked at several oil & gas companies, including the three US-based supermajors and a number of independents with market caps above $10 billion: Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), ConocoPhillips (NYSE: COP), Range Resources Inc. (NYSE: RRC), Tesoro Corp. (NYSE: TSO), Pioneer Natural Resources Co. (NYSE: PXD); Anadarko Petroleum Co. (NYSE: APC), Chesapeake Energy Corp. (NYSE: CHK), Apache Corp. (NYSE: APA), and Occidental Petroleum Corp. (NYSE: OXY). We’ve looked at the past year’s stock price performance and compared that with median target prices as reported by Thomson Reuters in an effort to find the stocks we think will be top performers in 2012.

Exxon Mobil Corp. (NYSE: XOM) has a median price target of $92 and a current price of around $84.62, for a potential upside of 8.7%. That’s the lowest potential gain of any of the stocks in this survey, but combined with a share price gain of about 15% in the past 12 months and a dividend yield of 2.3%, Exxon’s upside is stronger than the simple calculation. The stock’s 52-week trading range is $67.03-$88.23, so the stock is trading within about 5% of its 52-week high. Crude oil price hikes provide substantial benefits to Exxon’s shares, and those price hikes could add $10-$20/barrel to the company’s revenues in the coming year.

Chevron Corp. (NYSE: CVX) has a median price target of $122.50 and a current price of around $106.76, for a potential upside of 14.7%. Of the three supermajors, Chevron’s potential gain is the largest, it’s share price gain of nearly 16.5% in the past year is the largest, and its dividend yield of 3% is second in among the three giants. The stock’s 52-week trading range is $86.68-$110.01. Chevron has been the strongest bet among the three US supermajors this past year, and there’s little reason to expect that to change in 2012. A new 52-week high is close, and current events in the Middle East could push shares to a new high before the new year.

ConocoPhillips (NYSE: COP) has a median price target of $82 and a current price around $72.24, for a potential upside of about 13.5%. Conoco trails the other two supermajors in share price gain for the past 12 months, posting a rise of just 6.35%. The company’s dividend yield is highest of the supers, at 3.7%. The stock’s 52-week trading range is $58.65-$81.80. Conoco just sold assets in the North Sea for $330 million as it continues to try to bring its debt back under control. Of the three supermajors, this is the least likely to achieve its potential upside.

Range Resources Inc. (NYSE: RRC) has a median price target of $77.50 and a current price around $61.55, for a potential upside of 26%. But Range’s share price has jumped more than 36% in the past year, but the company pays a paltry dividend yield of just 0.3%. The stock’s 52-week trading range is $44.20-$77.24. With a market cap of right around $10 billion, Range is often mentioned as a takeover target from one of the supers or another mining company that wants to diversify into energy. Range holds about 800,000 leased acres in the Marcellus shale play, which is located close to the massive northeast US market.

Tesoro Corp. (NYSE: TSO) has a median price target of $28 and a current price around $23, for a potential upside of about 22%. The refiner’s share price has gained more than 25% this year, but the company pays no dividend. The stock’s 52-week trading range is $17.43-$29.61. Unlike the other major US refiner, Valero Energy Corp. (NYSE: VLO), Tesoro has made no major acquisitions recently, apparently satisfied to play the hand it’s got. That’s probably smart, considering Valero shares got whacked in the past 12 months, down more than -9%. But as the Brent/WTI differential closes, no refining stock is a good bet for 2012, regardless of the potential upside calculation.

Pioneer Natural Resources Co. (NYSE: PXD) has a median price target of $115 and a current price around $75.75, for a potential upside of 31.4%. The company’s shares gained a meager 2.2% in the past 12 months and the dividend yield is just 0.1%. The stock’s 52-week trading range is $58.63-$106.07. Like Range Resources, Pioneer carries a market cap of right around $10 billion. Most of the company’s assets are in Texas, and most are oil. Either as a takeover target or as a liquids producer, Pioneer is a solid play.

Anadarko Petroleum Co. (NYSE: APC) has a median target price of $100 and a current price of $75.75, for a potential upside of 32%. The share price gained more than 9% in the past year and the company pays a dividend yield of just 0.5%. The stock’s 52-week trading range is $57.11-$85.50. Until fairly recently, Anadarko’s assets have been exclusively onshore in the US, but its acquisition of Kerr-McGee gave it a position in the Gulf of Mexico and the company has also acquired assets offshore of Africa. The potential upside here, combined with the company’s share price performance last year, make Anadarko a solid prospect for gains in 2012.

Chesapeake Energy Corp. (NYSE: CHK) has a median target price of $35.50 and a current price around $22.87, for a potential upside of 55%. Shares have lost more than -11% in the past 12 months and the company pays a dividend yield of 1.5%. The stock’s 52-week trading range is $22-$35.95. Chesapeake’s shares are near the 52-week low today following a report from Reuters on how the company used shell companies to secure leases to drilling rights in Michigan and potential lawsuits springing from the practice. On the other side, at least one analyst thinks Chesapeake offers a “compelling risk/reward” opportunity. That awe-inspiring upside potential is probably out of reach though. Chesapeake holds a lot of debt, and any hiccup in the financial markets could raise havoc with the company.

Apache Corp. (NYSE: APA) has a median price target of $134 and a current price of $88.63, for a potential upside of 51.2%. The company’s share price has fallen more than -25% in the past year and it pays a dividend yield of 0.7%. The stock’s 52-week trading range is $73.04-$134.13. Several directors and company officers have been buying shares in the past month or so. Just under half of the company’s liquids production comes from its US assets, so the rising prices for WTI are positives for Apache. The large potential upside is probably not going to be closed, but the company’s shares could easily improve by 25% in 2012.

Occidental Petroleum Corp. (NYSE: OXY) has a median price target of $117.50 and a current price around $93.69, for a potential upside of 25.4%. The company’s share price has fallen more than -4% in the past 12 months and it pays a dividend yield of 2%. The stock’s 52-week trading range is $66.36-$117.89. Oxy’s assets include liquids-rich fields in southern California, where pricing for crude and liquids is higher than anywhere else in the country. Other assets in Texas and elsewhere onshore in the US will drive revenue and profit at Oxy this year, and the stock’s potential upside is not an impossible goal.

Overall, among these oil & gas stocks, Chevron would be the pick among the supermajors, and either Range Resources or Pioneer among the independents, primarily on the possibility of a takeover. Refiners face a tough 2012 and Conoco’s decision to split off its refining into a separate company won’t help matters.

Paul Ausick

Filed under: Oil & Gas, Value Investing Tagged: APA, APC, CHK, COP, CVX, OXY, PXD, RRC, TSO, XOM

Media Digest (12/20/2011) Reuters, WSJ, NYT, FT

247wallst — Tue, 20 Dec 2011 11:20:21 +0000

AT&T (NYSE: T) gives up on its effort to buy T-Mobile. (Reuters)

Apple (NASDAQ: AAPL) wins a patent case over HTC in the smartphone wars. (Reuters)

Olympus will sell shares to Sony (NYSE: SNE) and Fuji Film to help its battered balance sheet. (Reuters)

A new set of loans to the IMF will be set to help struggling EU nations, but the UK did not contribute to the 150 billion euro fund. (Reuters)

In a sign of worsening trouble for the financial firm, Bank of America (NYSE: BAC) shares trade below $5. (Reuters)

LightSquared, Falcone’s wireless company, is nearly out of money. (Reuters)

Sony sold 321,000 PlayStation Vitas in its first two days on sale. (Reuters)

A tax increase in the U.S. for 2012 is more likely as Congress wrangles over a budget. (WSJ)

An ITC ruling against HTC may hurt the efforts of Google’s (NASDAQ: GOOG) Android. (WSJ)

Google and KKR (NYSE: KKR) will invest in a new solar venture. (WSJ)

The U.S. Army Corps of Engineers granted ConocoPhillips (NYSE: COP) permission to drill in northern Alaska. (WSJ)

Caterpillar (NYSE: CAT) says its sales growth has improved. (WSJ)

FBI reports show crime dropped for the fourth straight year. (WSJ)

Spain will try to cut its deficit by more than $21 billion next year. (WSJ)

The number two executive at Cablevision (NYSE: CVC), Tom Rutledge, leaves for Charter (NASDAQ: CHTR). (WSJ)

Winn-Dixie is taken private by BI-LO for $560 million. (WSJ)

The New York Times (NYSE: NYT) may sell 16 local newspapers. (WSJ)

Procter & Gamble (NYSE: PG) has set plans for online coupons. (WSJ)

China may allow its citizens to invest more overseas. (WSJ)

A new UK plan will make banks and investment houses legally different entities by 2019. (NYT)

Japan will buy a new F-35 fighter jet from Lockheed Martin (NYSE: LMT). (FT)

The European Central Bank says contagion remains the greatest risk of the EU financial crisis. (FT)

Douglas A. McIntyre

Filed under: Press Digest Tagged: AAPL, BAC, CAT, CHTR, COP, CVC, GOOG, KKR, LMT, NYT, PG, SNE, T