Energy Business
Analysts Rake Over the Oil Patch, Chop Price Targets
August 2, 2017 11:55 am
Last Updated: January 12, 2020 9:31 am
When West Texas Intermediate (WTI) crude oil futures closed above $50 a barrel on Monday, after rising nearly 9% in the month of July, it seemed that the benchmark level might be able to hold. Those hopes were splintered when crude dipped below the $50 level on Tuesday and fell below $49 on Wednesday.
Credit Suisse last week even cut its long-term price forecast for WTI from $62.50 to $57.00 a barrel in 2020. The bank doesn’t even think the market will return to supply-demand balance until 2019. Societe Generale analyst Irene Himona cut her forecast for Brent crude from $55 a barrel by the end of this year to $50, implying a WTI price about $2 to $3 below that level.
These reduced forecasts for prices not only affect producers. The outlook for oilfield services firms and other oil patch players also has dimmed. A number of stocks saw lowered earnings estimates and price targets this morning from several analysts. Here’s a brief summary.
HSBC has tempered its price targets on the three big services firms:
Five firms cut their price targets on National Oilwell Varco Inc. (NYSE: NOV):
Oil and gas producer Newfield Exploration Co. (NYSE: NFX) missed estimates when it reported quarterly results this morning and shares plunged by 7%. Here are some cuts announced this morning as well:
Other producers experiencing ratings and price cuts were Pioneer Natural Resources Co. (NYSE: PXD) and Range Resources Corp. (NYSE: RRC). Here’s the sad news on these two:
A smaller oil and gas services firm, Precision Drilling Corp. (NYSE: PDS), got a price target cut from $6 to $4.50 from analysts at Jefferies.
Finally, fracking sand provider U.S. Silica Holdings Inc. (NYSE: SLCA) saw price target cuts from four firms:
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.