The oil and gas industries have been a burden to the stock market, as has just about anything tied to energy. Almost all the stocks in this group have been absolutely atrocious performers since the end of 2014. In fact, some of the largest companies among industry sub-groups have seen their shares fall 50%, 75% or even more. And the waves of expected bankruptcies are believed to only be at the starting point right now.
Amazingly, Wall Street analysts still think some of these companies offer incredible long-term upside. Some analysts have maintained Buy and Outperform ratings on these stocks and others have decided in recent weeks that the carnage has gone too far.
24/7 Wall St. offers a harsh warning here. If oil does not start to recover, and particularly if oil’s slide into oblivion continues, it should only be expected that these analyst calls will have seriously missed their marks or will prove to be far too early. There is also the notion that the stock market has been listing lower and lower since the end of 2015, and readers should note that most analyst calls were first defending the oil and gas sector even a year ago at far higher stock and oil prices.
OK, so now that you have been warned about some of the most obvious risks in energy stocks for now, here are four oil and gas stocks with recent analyst upgrades or very positive calls.
On February 9, Janney Capital Markets started Antero Midstream Partners L.P. (NYSE: AM) at Buy with a $27.00 fair value estimate (versus a $20.45 prior close). The firm believes the pullback in the stock presents an attractive opportunity that will provide superior long-term returns. For a counter take: just the day before, Antero Midstream was downgraded from Outperform to Neutral at R.W. Baird with a $23 price target.
The shares closed out last week at $19.24, against a 52-week trading range of $16.47 to $29.76. The stock has a from Thomson/First Call consensus analyst price target of $29.58 and a market cap of almost $3.4 billion.
Janney’s report said:
The uncertainty surrounding drilling schedules and production volumes appears to be at a peak frenzy. Historically, if investors buy good assets when things look the most gloomy, they are well rewarded. Our outlook for 26% annual distribution growth is underpinned by attractive drilling economics at its sponsor.
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