Thursday’s top analyst upgrades, downgrades and initiations contained many individual stock calls. Also seen was an unusual number of changes in analyst ratings, targets and estimates in the energy sector. This has led to a vast number of oil and gas stocks seeing changes.
The analyst changes here matter because West Texas Intermediate crude was last seen trading up 80 cents at $50.31. That move above $50 is the first such move since about 20 days ago, when oil broke under $50 for the first time in 2017.
Jefferies is getting more bullish on the energy sector, with an oil official price forecast that is higher from here. The firm said the group looks very cheap (price to book) and revisions are heading higher.
Credit Suisse issued a view on the oil and gas exploration and production sector on Thursday. While the firm was constructive on the long-term gas strip, it does see a reduction in its longer term forecasts. So many estimates and target prices were adjusted lower.
Credit Suisse also detailed in a recent report:
The median gas operator in our coverage universe has 70% of 2017 volumes hedged, and as a result we see limited benefit to the group coming from an improvement at the front end of the gas curve with EQT being the exception (36% hedged at $3.27). We highlight EQT and GPOR as our preferred way to play projected 14% upside to the 2018/2019 gas strip, and remain Outperform-rated on AR and RRC.
The broad picture of US natural gas remains dominated by the supply side. We once again reduce our long-run or mid-cycle required price down – by 25 cents, to $3.25 MMBtu. However, we also see some real upside price-risk based on near-term supply and demand dynamics as opposed to simply weather. We raise our 2017 gas price forecast to $3.44/MMBtu (from $3.25/MMBtu), leave our 2018 estimate stable at $3.5.
These are the numerous energy sector analyst calls with an impact on the oil and gas sector on Thursday, March 30, 2017:
Apache Corp. (NYSE: APA) saw its price target cut to $73 from $77 by Credit Suisse.
Chesapeake Energy Corp. (NYSE: CHK) had its price target cut by Credit Suisse to $6 from $7.
Credit Suisse also cut its price target price on Concho Resources Inc. (NYSE: CXO) to $158 from $160.
ConocoPhillips (NYSE: COP) was up big on news of a key asset sale leading to higher buybacks and cutting down its debt. UBS raised it to Buy and the price target was raised to $55 from $51. Credit Suisse raised estimates and its price target for the stock to $60 from $55.
Credit Suisse cut its target price on Continental Resources Inc. (NYSE: CLR) to $56 from $57.
And Credit Suisse cut its target price on Devon Energy Corp. (NYSE: DVN) from $58 to $57.
EOG Resources Inc. (NYSE: EOG) was raised to Buy from Neutral at UBS, which also raised the price target to $109 from $105.
Gulfport Energy Corp. (NASDAQ: GPOR) had its price target price cut to $28 from $33 at Credit Suisse.
Credit Suisse cut its price target on Hess Corp. (NYSE: HES) to $66 from $67.
A Buy rating was issued on Kinder Morgan Inc. (NYSE: KMI) by Deutsche Bank, along with a price target of $28.
Murphy Oil Corp. (NYSE: MUR) had its price target cut to $36 from $37 at Credit Suisse.
Credit Suisse cut Noble Energy Inc. (NYSE: NBL) price target to $43 from $44.
Credit Suisse’s $46 price target on Parsley Energy Inc. (NYSE: PE) was lowered to $45.
PDC Energy Inc. (NASDAQ: PDCE) had its price target cut to $79 from $82 at Credit Suisse.
Pioneer Natural Resources Co. (NYSE: PXD) saw its price target lowered slightly, to $220 from $221, at Credit Suisse
Plains All American Pipeline L.P. (NYSE: PAA) was reinstated with an Equal Weight rating with a $31 price target at Barclays.
Barclays also issued an Equal Weight rating on Plains GP Holdings L.P. (NYSE: PAGP), along with a $32 price target.
Range Resources Corp. (NYSE: RRC) was raised to Buy from Neutral at UBS, but a rival call from Credit Suisse lowered its target price to $39 from $44 in its sector target cuts.
Sunoco L.P. (NYSE: SUN) was started with a Sell rating and assigned a $21 price target (versus a $24.19 prior close) at Goldman Sachs.