Analyst Action: These Resource Stocks Are On Watch!

| June 27, 2014 | 0 Comments

stock analystIt’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…

Schlumberger (SLB)- The top-tier oil services provider was upgraded to outperform by multiple Wall Street institutions this week. RBC Capital, Morgan Stanley, Jeffries, Howard Weil, and a handful of others think SLB shares are worth anywhere from $127 to $168 a share. With the stock changing hands at $116, this represents substantial upside potential!

Synergy Resources (SYRG)- Roth Capital upgraded the Wattenberg producer to “Buy” with a $20 price target. With shares trading in the $13 range, their target represents 53% upside potential.

Bonanza Creek Energy (BCEI)- The Niobrara operator received another upgrade this week, this time by Capital One. The bank moved BCEI to “overweight” with a $77 price target.

Comstock Resources (CRK)- This small-cap operator, with operations in Texas and Louisiana, had their stock upgraded to “Buy” at Stifel. Analysts believe CRK shares should rise to $33.

Petroleo Brasileiro (PBR)- The Brazilian producer was downgraded to “Equal Weight” at Morgan Stanley. Analysts left the price target unchanged at $16.

National Oilwell Varco (NOV)- Another oil services giant is on a bullish roll. Analysts at Gabelli upgraded NOV to “Buy” with a $122 price target. With shares trading in the $81 range, their target represents 50% upside potential!

Halcon Resources (HK)- Analysts at Miller Tabak initiated coverage on the Tuscaloosa Marine Shale operator with a “Buy” rating and $9 price target.

Devon Energy (DVN)- The North American producer, with operations in the US and Canada, had the price target on their shares upped to $87 at Howard Weil.

Kodiak Oil & Gas (KOG)- Not only is this Bakken producer getting buyout rumors, but analysts at GMP Securities think the company’s shares should be trading at $19. With KOG shares currently trading in the $14 range, GMP’s target represents 35% upside potential.

Gastar Exploration (GST)- The Marcellus Shale operator had their price target upped to $12 at Imperial Capital.

And last, but certainly not least…

Emerald Oil (EOX)- The small-cap Bakken producer has 91,000 net acres in the Williston Basin of North Dakota and Montana. Analysts at GMP Securities initiated EOX at a buy this week with a $12 price target. With shares trading in the $7 range, their target represents nearly 70% upside potential!

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 specifically on commodities and the companies producing them.

Options Profit Pipeline subscribers are achieving gains of 115% in PetroQuest (PQ) this week!

Until Next Time,

Justin Bennett

Tags: , , , , , , , , , , , , ,

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.