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 most 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…
Viper Energy (VNOM)- This recently IPO’d Permian Basin producer was initiated with a “market perform” and $34.00 price target at Northland Securities.
Range Resources (RRC)- This top-tier natural gas producer was initiated at Canaccord Genuity with a “buy” rating. Cantor Fitzgerald also reiterated their “buy” rating on the company this week.
Oasis Petroleum (OAS)- Analysts at FBR Capital Markets initiated this Bakken producer with an “outperform” rating. Some analysts also see OAS as a takeover target by a larger competitor.
Miller Energy (MILL)- The small-cap operator, who has operations in the Cook Inlet of Alaska, was downgraded to a “hold” by Casimir Capital.
Matador Resources (MTDR)- Analysts at Wunderlich raised this Eagle Ford and Permian Basin operator to a buy with a $34 price target. With shares currently trading in the $26 range, the upgrade represents 30% potential upside.
Eclipse Resources (ECR)- This newly IPO’d Utica Shale and Marcellus Shale operator was initiated by Morgan Stanley and Capital One this week. Both banks have an “outperform” rating and price targets of $32 and $28 respectively.
Whiting Petroleum (WLL)- Upon purchasing Kodiak Oil & Gas (KOG) last weekend, Whiting is being upgraded by nearly all of Wall Street. Wunderlich, Simmons, KLR Group, Tigress Financial, Barrington, Brean Capital, and more, have “overweight” or “buy” ratings, with price targets varying from $100 to $140.
Northern Oil and Gas (NOG)- Wunderlich raised the Bakken producer’s price target to $20. It’s important to note that NOG is a non-operated oil producer. In other words, they simply purchase a minority interest in drilling projects.
EOG Resources (EOG)- The quickly growing international oil producer was initiated by Argus this week. Analysts have EOG at a “buy” with a $135 price target. With shares trading in the $115 area this represents 17% upside profit potential.
And last, but certainly not least…
Gastar Exploration (GST)- The Marcellus Shale and Hunton Shale operator was initiated with a “buy” rating and $12 price target at Canaccord Genuity- a 50% premium to current prices.
There you have it…
What you see above are the most captivating, and potentially profitable, ratings changes I came across this week. Shares prices are already 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.
Subscribers are closing out highly profitable positions in Encana (ECA) and Petroquest (PQ) this week!
Until Next Time,
Justin Bennett
Category: Natural Resource Stocks
