Analyst Action: These Resource Stocks Are On Watch!

| September 8, 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 caught my eye…

ConocoPhillips (COP)- The international oil and gas giant had its price target raised to $95 at Oppenheimer. Over the past month, analysts at Argus, Simmons, and Oppenheimer have either upgraded their rating or raised their price target on COP. With shares trading in the $80 area, Oppenheimer’s target represents 18% profit potential.

Marathon Oil (MRO)- Analysts at Deutsche Bank reiterated their “Buy” rating and $52 price target on the international oil and gas producer. MRO has operations in North America, Europe, Africa, and the Middle East. Deutsche Bank’s target is a 30% premium to current prices.

WPX Energy (WPX)- Iberia Capital initiated the multi-basin US producer with an “Outperform” rating and $33 price target.   Within the past month, analysts at Howard Weil and Zacks have also upgraded the oil and gas explorer to outperform. WPX has operations in the Bakken, Powder River Basin, Piceance Basin, San Juan Basin, and Marcellus shale.

Bonanza Creek Energy (BCEI)- This Wattenberg explorer was also initiated with an “Outperform” rating at Iberia Capital last week. Analysts have a $75 price target on BCEI, which is a 33% premium to current prices.

Occidental Petroleum (OXY)- Analysts at Argus boosted their price target on this international producer to $116. With shares trading just shy of $100 this morning, Argus’ target represents 16% upside. OXY has operations in the US, Latin America, and the Middle East.

And last, but certainly not least…

Callon Petroleum (CPE)- The Permian producer had their price target raised to $16 with an “Outperform” rating at Maxim Group. Imperial Capital joined the conversation with a price target upgrade to $14. With CPE shares trading at $10, these new targets represent 40-60% upside profit potential.

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.


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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.