Marathon Oil Corp. (NYSE: MRO) was included in a large list of stocks to Buy from Deutsche Bank in the oil patch this week. The firm thinks that $50 is now the inflection point for oil and it has several winners. Marathon is said to have higher multiple businesses and the upstream cash margins have room to move up, even as the shares have a net asset value discount relative to industry peers. Marathon investors are paid a 1.61% dividend. The $18 Deutsche Bank target was well above the consensus target of $14.75 at the time, as well as the Thursday close at $12.33 per share. Marathon closed at $12.30 on Friday, and its 52-week range is $6.52 to $28.27.
Oasis Petroleum Inc. (NYSE: OAS) was raised to Buy from Hold and the price target was raised to $12 from $9 (versus an $8.68 prior close) at Jefferies. The firm noted that Oasis again showed sharp cost reductions and its sixth straight quarter of flat volumes despite plunging investment. The firm did warn that the stock remains a higher-risk investment given high financial leverage, but stronger world oil markets and a strong inventory make this one compelling to Jefferies. A Wunderlich research note on May 11 maintained a Hold rating but raising its price target to $8 from $4. Topeka Capital Markets also reiterated its Buy rating Oasis Petroleum on May 10, raising its price target to $14 from $10. Oasis shares closed at $9.43 on Friday, with a consensus price target of $9.95 and a 52-week range of $3.40 to $17.96.
Schlumberger Ltd. (NYSE: SLB) was featured as a top oil stock to buy by RBC Capital Markets on May 10. The company will get to enjoy its leadership role in oil and gas services now that the Halliburton-Baker Hughes deal is off. Investors also get a solid 2.7% dividend yield. RBC’s price objective was listed at $95, versus the consensus price target at the time of $87.41. Schlumberger shares were at $72.77 ahead of the call, and Friday’s close brought a $72.43 price.
Williams Companies Inc. (NYSE: WMB) was started as Outperform with a $25 price target in a sector call this week from Bernstein. This analyst action call implied some 30% upside from the prior $19.14 close, but that was without considering the double-digit distribution yield, if that payout remains. Williams’ consensus price target was $24.69 at the time, but that rose to $25.50 by the end of the week. Shares closed at $19.35 on Friday, in a 52-week range of $10.22 to $61.38.
Williams Partners L.P. (NYSE: WPZ) was also a part of the Bernstein call, with the firm assigning an Outperform rating here as well. Bernstein’s $40 price target implied upside of a sharp 48% from the $26.92 prior close. That upside is also without considering its double-digit distribution yield, if it remains in place. Investors took this note to heart it seems. Units of Williams Partners were up 2.2% at $27.50 late on Wednesday, and the closing price on Friday was $30.19 after a 3.5% gain. It has a consensus target price of $55.00 and a 52-week range of $12.69 to $59.44.
The bonus eighth stock included here is U.S. Silica Holdings Inc. (NYSE: SLCA), but it comes with a caveat. This is from a Jefferies research call earlier in the week. Jefferies has an official Hold rating on the stock rather than a Buy rating, but the way the analyst talked this one up it sounds like the firm may be issuing an upgrade soon. Jefferies featured U.S. Silica quite positively against other related stocks on which it already has Buy ratings. On May 9, the Jefferies report said:
The frac sand industry has lowered its cost structure this downturn, in large part through capacity expansion, including of Regional/Brown sands. We believe some industry adoption of Brown sand is likely to be permanent, which can delay the recovery in frac sand pricing. We believe U.S. Silica is best positioned to benefit from Brown sand growth given its position and balance sheet. Proprietary analysis includes a bottoms-up cost curve and sand mine hours.
U.S. Silica shares closed down 1.9% at $25.04 on Friday, with a consensus price target of $28.19 and a 52-week range of $13.48 to $34.99.
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