Analyst Action: These Resource Stocks Are On Watch!

| November 10, 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… 

EOG Resources (EOG)- After reporting strong earnings last week, analysts at Tudor Pickering, Barclays, RBC Capital, and Miller Tabak upgraded the international oil and gas explorer to “Buy”. Price targets range from $113 to $122 amongst these analysts.

Keep in mind, Morgan Stanley still has an “overweight” rating and $136 price target.

EOG is trading at $99 this morning.

Oasis Petroleum (OAS)- The Bakken shale pure play reported weaker than expected quarterly earnings last week. The news sent OAS to a new 52-week low at $25. However, analysts at Wunderlich, Canaccord Genuity, and FBR Capital Markets reiterated their “buy” rating after earnings. Price targets range from $47 to $54, which is at least 80% higher than current prices.

Matador Resources (MTDR)- The Eagle Ford shale and Permian Basin producer had its price target raised from $31 to $33 at Wunderlich. Canaccord Genuity joined in the fun by initiating coverage at a “buy” with a $31 price target. With shares crossing at $23 this morning, these targets represent at least 34% profit potential.

Gran Tierra Energy (GTE)- Analysts at Credit Suisse reiterated their “outperform” rating and $7.50 price target on the South American oil and gas explorer. With shares trading at $4.50 this morning, this target represents a 66% premium to current prices.

Energy Transfer Partners (ETP)- The pipeline MLP had their price target boosted from $63 to $72 at RBC Capital. What’s more, analysts at Barclays and Stifel Nicolaus reiterated their “buy” rating on ETP. Keep in mind, ETP pays a 5.9% dividend at current prices.

And last, but certainly not least…

Gastar Exploration (GST)- Analysts at Imperial Capital lowered their price target on the Appalachia and Mid-Continent producer from $12 to $8. However, with shares trading at $4 this morning, Imperial’s diminished price target is still a 100% 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. Share 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.