Analyst Action: These Resource Stocks Are On Watch!
It’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…
Transatlantic Petroleum (TAT)- The Turkish oil explorer was upgraded to “outperform” with a $12.80 price target at Zacks. With shares crossing the tape at $11 this morning, the target represents 16% upside potential.
MarkWest Energy Partners (MWE)- The pipeline operator had their price target raised to $83 at Credit Suisse. It’s important to note that MWE also offers a 4% dividend.
Rex Energy (REXX)- After plummeting to the $13 area over the past two months, REXX had their price target raised to $18 at KLR Group. Analysts have a “accumulate” rating on the Appalachian Basin producer.
Parsley Energy (PE)- This recent IPO’s “outperform” rating was reiterated at Raymond James. Analysts have a $30 price target on the Permian Basin producer, which is a 42% premium to current prices.
PDC Energy (PDCE)- MLV and Co. reiterated their “buy” rating and $87 price target on the Utica/Marcellus/Wattenberg producer. With shares trading in the $56 range this morning, MLV’s target is a 55% premium to current prices.
Athlon Energy (ATHL)- Here’s a Permian explorer receiving multiple price target upgrades last week. Citigroup, Credit Suisse, and Howard Weil all have “buy” or “outperform” ratings on ATHL with price targets ranging from $51 to $56.
Oasis Petroleum (OAS)- With shares diving $12 a share since late July, Stern Agee upgraded OAS to a “buy”. Analysts see the Bakken producer trading at $59, which is a 28% premium to current prices.
And last, but certainly not least…
InterOil (IOC)- Analysts at Sanford Bernstein initiated the Australian refiner at “outperform” with a $90 price target. With shares trading in the $58 range, Bernstein’s price target represents 55% upside profit potential.
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.
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Until Next Time,
Justin Bennett
Category: Natural Resource Stocks
