Analyst Action: These Resource Stocks Are On Watch!

| September 22, 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… 

Athlon Energy (ATHL)- This up and coming Permian Basin producer was initiated at “Buy” with a $60 price target at Barclays. What’s more, Bank of America and KLR Group also upgraded ATHL to “Buy” with $60 price targets. With shares crossing the tape at $45, these targets represent $33% upside profit potential.

Occidental Petroleum (OXY)- This top-tier international oil and gas producer was downgraded to “equal weight” from “overweight” at Barclays. What’s more, the company’s price target was slashed from $117 to $109.

Noble Energy (NBL)- Atlantic Securities initiated coverage on this international oil explorer with an “overweight” rating and $88 price target, which is a 24% premium to current prices.

Laredo Petroleum (LPI)- The Permian Basin explorer was downgraded to “neutral” from “buy” at Bank of America. Canaccord Genuity also initiated coverage at “neutral” last week. Both firms have a $28 price target on LPI.

Whiting Petroleum (WLL)- Canaccord Genuity initiated coverage on this Bakken producer with a “buy” rating and $108 price target. With shares trading at $80, the target represents 35% upside profit potential.

Emerge Energy Services (EMES)- Goldman Sachs initiated coverage on the frac sand supplier with a “Buy” rating and $153 price target. Goldman’s target represents a 23% premium to current prices.

And last, but certainly not least…

Jones Energy (JONE)- Suntrust boosted their price target from $25 to $27 on this Texas/Oklahoma producer. Johnson Rice followed suit by initiating coverage with an “Overweight” rating. Suntrust’s price target is a 42% 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

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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.