Analyst Action: These Resource Stocks Are On Watch!
It’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 caught my eye…
Apache (APA)- The international oil and gas producer was upgraded to overweight with a $118 price target at Alembic Global Advisors. Apache has operations in the UK, Egypt, Australia, Canada, and the US. Alembic’s target represents 18% upside profit potential.
Centerpoint Energy (CNP)- Argus upgraded the natural gas and electric utility operator to a “Buy” with a $29 price target. With shares closing at $24.50 on Friday, Argus’ target represents 18% profit potential.
National Oilwell Varco (NOV)- The international oil services giant had their price target upped to $100 from $92 at FBR Capital Markets. Shares of the $36 billion market cap company are trading at $82.
EV Energy Partners (EVEP)- Analysts at Raymond James upgraded the oil and gas limited partnership to “Strong Buy” with a $49 price target. With shares trading in the $40 range, that’s 22% profit potential. What’s more, EVEP currently pays a 7% dividend.
Synergy Resources (SYRG)- This quickly growing Wattenberg producer was initiated with a “Buy” rating and $17 price target at Canaccord Genuity. It’s worth noting that FBR Capital Market already has an “Outperform” rating and $19 price target on SYRG. With shares trading just shy of $13, these targets represent upside of at least 30%.
Kinder Morgan Energy Partners (KMP)- After a massive corporate restructuring a few weeks ago, analysts at RBC Capital upped their KMP price target to $109 from $83. With shares crossing the tape at $97, the new target represents 12% profit potential.
Halcon Resources (HK)- After reporting Tuscaloosa Marine Shale well results early last week, analysts at MLV company upgraded the company’s rating to “Buy” with an $8 price target- a 45% premium to current prices.
And last, but certainly not least…
Miller Energy (MILL)- Analysts at Brean Capital reiterated their “Buy” rating and $9 price target on the Cook Inlet, Alaska producer. With shares trading just shy of $5, Brean’s price target is an 80% 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.
Until Next Time,
Justin Bennett
Category: Natural Resource Stocks
