The oil and energy sector is in a rough spot. Still, a Federal Reserve report showed less-bad expectations even as rig counts are still on the decline. Still, West Texas crude was above $50 all week and energy stocks held up by and large this last week. 24/7 Wall St. reviews dozens of analyst upgrades and downgrades each morning, and this week there were five key oil and gas stocks (including a master limited partnership, or MLP) in which analysts have been very positive.
Investing in the energy patch has been very painful for those who plowed into oil and gas last year. Many investors look for battered companies to invest in, and oil and gas has many companies and entities that fit that bill. We have included trading history and offered what the implied upside would be if the price targets are hit. Color and details about each individual analyst call also have been provided.
Investors should keep in mind that analysts would almost always admit that they do not know what price is ever an exact bottom. These upside price targets are generally a year out. Here are the five key oil and gas stock calls we have seen from analysts in recent days.
Devon Energy Corp. (NYSE: DVN) was reiterated as Buy and the price target was raised to $76 from $68 at Argus on Tuesday. The independent research firm said that Devon is better positioned following the completion of recent asset divestitures and acquisitions. With shares trading at $64.40 late on Friday, the implied upside here was just over 18%, or almost 20% if you include that 1.5% dividend yield.
Energy Transfer Equity L.P. (NYSE: ETE) was started on the Goldman Sachs Conviction Buy list on Wednesday. The firm assigned an $86 price target, versus a prior $63.28 close, but the price of the MLP was $65.71 late on Friday. This left an implied upside of 30% from the higher price, but investors should know that the consensus price target is closer to $78.50 and price targets here are all over the place.
Patterson-UTI Energy Inc. (NASDAQ: PTEN) was raised to Outperform from Market Perform at Cowen last Thursday. The price target was put at $23 in the call, and the prior close had been $19.29. Patterson-UTI Energy shares were trading at $20.05 late on Friday, and its yield from the dividend is roughly 2%. This leaves an implied upside of close to 17% for investors if RBC’s target is hit, but RBC is more bullish than most as the consensus price target is now around $21.
Total S.A. (NYSE: TOT) was raised to Outperform from Market Perform at RBC Capital Markets on Tuesday. No exact price target was seen in the call in dollar terms, but this is a French oil and gas giant. Total’s American depositary shares were trading at $51.41 on Friday’s close, and it has a 52-week range of $46.61 to $74.22.
Weatherford International (NYSE: WFT) was raised to Outperform with a $19 price target at RBC Capital Markets on Friday. Weatherford shares were marginally lower late on Friday at $13.80, leaving an implied upside of almost 38% if the firm is right. Weatherford has a 52-week range of $9.40 to $24.88, so it is more volatile than typical companies. Investors may want to know that the consensus price target is $14.04, and the highest analyst target is up at $20.
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