Energy

Stifel Very Nervous on Oil: 5 Buy-Rated Stocks Cut to Hold

Lee Jackson

Published: April 6, 2016 12:15 pm

Last Updated: January 13, 2020 11:05 am

The oil markets continue seesaw, and on Wall Street the mood is decidedly mixed. While some see a great second-half story, with the potential for oil to trade as high as $50 by the end of the year, others are getting negative. It’s easy to see why too. There is a mixed bag of pro and con issues, and there is no clear direction on which way things will go, especially short term.

In a new research report, Stifel has become much more cautious on the sector and especially the more aggressive stocks that the firm covers. The analysts note that the spot price can’t break the downtrend on sustained volume, and any sort of coordinated OPEC action at the upcoming meeting looks very unlikely, as Iran has said flat out that it will not comply.

The Stifel team has cut five of the firm’s aggressive Buy-rated stocks to Hold, targeting the ones they believe are either underhedged on their production or outspending current 2016 cash flow. Investors may want to review their portfolios to see if they are holding any of those stocks that are among the Stifel analysts are downgrading.

Anadarko Petroleum

This stock is still down a stunning 58% since the highs printed in 2014. Anadarko Petroleum Corp. (NYSE: APC) operates through three segments. The Oil and Gas Exploration and Production segment explores for and produces natural gas, oil, condensate and natural gas liquids (NGLs).

The Midstream segment provides gathering, processing, treating and transportation services to Anadarko and third-party oil, natural gas, and NGL producers, as well as owns and operates gathering, processing, treating and transportation systems in the United States. The Marketing segment markets oil, natural gas and NGLs in the United States. It also markets oil and NGLs internationally, as well as has anticipated LNG production from Mozambique.

The Stifel team cut Anadarko Petroleum from Buy to Hold, though it currently does not list a target price for the shares. The stock’s 52-week trading range is $28.16 to $95.94. The Thomson/First Call consensus price target is set at $58.45. The stock was trading on Wednesday at $44.84.

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