Analyst Action: These Resource Stocks Are On Watch!

| October 6, 2014 | 0 Comments

Analyst ActionIt’s Monday, and that means it’s time for a look at compelling analyst upgrades and downgrades.

In case you’re unaware, analysts at the biggest banks and investment firms on Wall Street provide research on a multitude of natural resource companies.  It’s not always the case, but most times a notable bullish change in a respected analyst’s outlook can have a significant influence on a company’s share price.

Of course, their ratings changes aren’t always positive…

When an analyst applies a big downgrade, shares can lose ground quickly.

After all, it’s not a great idea to be fully invested in a company that’s falling out of favor with Wall Street.  At the very least, a downgrade can slow buying activity, which opens the door to lower prices.

Either way, it’s important to keep an eye on the analyst activity.  Doing so can give you a substantial leg up on the market.

Here are last week’s natural resource company ratings changes that really caught my eye… 

Range Resources (RRC)-  Imperial Capital initiated this top-tier natural gas producer with an “outperform” rating and $100 price target.  With RRC shares currently trading in the $65 area, Imperial’s target represents 53% profit potential.

Cimarex Energy (XEC)-  Analysts at Stifel Nicolaus maintained their “buy” rating and raised their price target on this Permian producer to $160- a 35% premium to current prices.

Cenovous Energy (CVE)-  After a brutal selloff in recent weeks, this Canadian oil sands producer has their “buy” rating reiterated at Citigroup.  Analysts have a $37 price target on CVE, which is a 48% premium to current prices.

Williams Co. (WMB)-  Analysts at JP Morgan Chase and Citigroup reiterated their “buy” ratings on the pipeline provider with a $70 and $72 price target respectively.  With shares trading at $55 this morning, these targets represent at least 27% upside profit potential.

National Oilwell Varco (NOV)-  This large-cap oil services provider was upgraded to “strong buy” at Raymond James.  What’s more, Standpoint Research upped NOV from “hold” to “buy” with a $90 price target.

EOG Resources (EOG)-  Shares of this heavily oversold Bakken producer were upgraded to “buy” at KLR Group and ING Group.  Both firms have a $140 price target on EOG, which is a 48% premium to current prices.

And last, but certainly not least…

Energy XXI Limited (EXXI)-  This Gulf of Mexico oil explorer was upgraded to “buy” at Guggenheim.  Analysts have a $19 price target on the company, which is a 90% premium to current prices.

There you have it…

What you see above are the most captivating, and potentially profitable, ratings changes I came across over the past few days.  Shares prices may already be reacting to the ratings and price target adjustments.

Now remember…

Just because an analyst has a bullish view on a company doesn’t mean you should dump all your money into the company’s stock.  Do your own due diligence and always use correct position sizing and risk control measures in your trades.

If you’d like me to do the work for you, check out the Options Profit Pipeline.  This one-of-a-kind options service focuses specifically on commodities and the companies producing them.

Subscribers are seeing gains of +80% in both our put positions on Newmont Mining (NEM) and Agnico Eagle Mines (AEM)!

Until Next Time,

Justin Bennett

Tags: , , , , , , , , , ,

Category: Natural Resource Stocks

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.