Investors are still buying the dips in their hunt for value. Now that the stock market finally corrected more than 10% before recovering, many sectors have stabilized. Others remain in a state of flux. Oil, gas and energy remains in a very high state of uncertainty. Still, oil is in the mid-$40s for West Texas Intermediate (WTI) crude, and it has acted as though it wants to find some stable ground.
With huge sell-offs come huge long-term opportunities for the most nimble and most opportunistic investors. Some of these investors have looked for the formation of a bottom in energy, or they are looking for long-term value out in the next year or longer.
24/7 Wall St. evaluates dozens of analyst research reports each day of the week, and there are almost always some key upgrades or downgrades in the energy sector. The problem to date is that sticking your neck out in the energy sector has not showed much mercy to investors who are just buying dips blindly. Another risk is that Goldman Sachs just outlined how oil could dip back into the $20s — and presumably readers do not need to be told what oil prices anywhere close to $20 will do to oil, gas and other energy stocks.
Several analyst calls from this past week have highlighted that the most recent selling pressure may have brought up some long-term bargain opportunities in the oil and gas sector. That also pertains to tangents to energy, via services, master limited partnerships, solar and even coal.
24/7 Wall St. wants to remind readers that analysts making upgrades and downgrades often have no more insight than many institutional investors. Analysts are often wrong, and trying to call a formal bottom in the price of oil has wrecked many careers and has created many financial implosions in 2015. These are some of the key energy analyst calls for investors with a long-term view seen in the past week.
Chevron Corp. (NYSE: CVX) was raised to Overweight from Neutral at JPMorgan on Friday. The firm really sees multiple reasons to own the stock. Its $86 price target is more than $10 higher than the $75.79 close on Friday and the prior close ahead of the call was $75.66. Chevron had a consensus price target of about $99.00 mid-week, but that is now down at $97.05. Chevron’s 52-week trading range is $69.58 to $125.70. One of the big catalysts for the call was value, and another is that JPMorgan thinks its 5.6% dividend yield is going to remain a safe dividend. This would imply potential upside of nearly 20% on a total return basis if the firm is right on its price target.