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:
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