Analyst Action: These Resource Stocks Are On Watch!
It’s Friday, and that means it’s time for another edition of Analyst Action.
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 many times a notable bullish change in a respected analyst’s outlook can be the start of great things for a company’s share price.
Of course, their ratings changes aren’t always positive…
When an analyst applies a big downgrade, a company’s share price 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 this week’s natural resource company ratings changes catching my eye…
Triangle Petroleum (TPLM)- The Bakken producer had their price target upped to $15 with an “Outperform” rating at Howard Weil. This name received multiple upgrades last week as well after reporting strong quarterly results.
Carrizo Oil and Gas (CRZO)- Northland Securities upped their price target on the multi-basin explorer to $76. With shares trading in the $67 range, the upgrade represents 13% of potential upside.
Bonanza Creek Energy (BCEI)- Mizuho raised their price target on the Niobrara operator to $70. With shares trading in the $61 range, this represents 14% of potential upside.
Anadarko Petroleum (APC)- The international producer had their price target upped to $120 by analysts at Argus.
Goodrich Petroleum (GDP)- After going on a spectacular run in recent weeks, GDP was downgraded from “focus stock” to “sector perform” at Howard Weil. GDP reported well results earlier this week that weren’t quite up to market expectations. It’s important to note that Howard Weil still has a $37 price target on the name in spite of the downgrade. GDP shares are currently trading in the $28 area.
Oasis Petroleum (OAS)- The Bakken producer was initiated at Iberia Capital this week with an “outperform” rating.
Continental Resources (CLR)- This top-tier Bakken name was downgraded to “equal weight” at Capital One Financial.
Sanchez Energy (SN)- The EagleFord and Tuscaloosa Marine Shale operator was upgraded to “outperform” with a $45 target at Northland Securities. Shares are currently trading at $37.
PDC Energy (PDCE)- Analysts at Howard Weil upped the price target on the Utica and Marcellus producer to $84. With shares trading in the $69 range, that represents 21% of potential upside.
Spectra Energy (SE)- The natural gas pipeline provider had their price target upped to $45 at Argus.
Newfield Exploration (NFX)- Here’s another US producer gaining bullish momentum. Analysts at Jefferies Group raised their price target on the company to $61. With shares trading in the $42 range, there’s 45% of potential upside.
There you have it…
As you can see, analysts made some big ratings changes this week. The share prices of many of the natural resource companies above are already reacting to the news.
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 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 on commodities and the companies producing them.
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Until Next Time,
Justin Bennett
Category: Natural Resource Stocks
