Analyst Update: These Resource Stocks Are On Watch!
We’re starting a new feature article here at Commodity Trading Research. Every Friday you’re going to find information regarding important Wall Street analyst upgrades and downgrades for the week.
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 particular company’s share price.
Of course, their ratings aren’t always positive…
When an analyst applies a big downgrade to a company, the share price can lose ground quickly. After all, it may not be such a great idea to be fully invested in a company that is 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 that caught my eye…
Schlumberger Limited (SLB) -With shares currently trading in a strong uptrend at $103, Guggenheim raised the company’s price target to $130 with a “buy” rating. With a market cap of $135 billion, SLB is the largest oil and gas equipment & services provider in the world.
Pioneer Natural Resources (PXD) – This top-tier US oil and gas producer was given an “outperform” rating by ING Group. ING expects shares to rise from the current price of $210 a share to $275. This represents upside of 30%.
Seadrill Partners (SDLP) – RBC Capital gave this offshore driller an “outperform” rating and a $40 price target. With shares currently trading at just over $33, this represents 21% upside.
Legacy Reserves LP (LGCY) – RBC Capital also upgraded this oil and gas exploration Limited Partnership to “Top Pick” with a price target of $36.
Magnum Hunter (MHR) – This quickly growing oil and gas producer with exposure to the Utica, Marcellus, and Bakken Shale was initiated at Credit Suisse with an “outperform” rating and $9 price target.
Conoco Phillips (COP) – With shares currently trading in a strong uptrend at $79, COP was given a “buy” rating and $90 price target by Guggenheim and Societe Generale.
Sanchez Energy (SN) – This independent oil and gas producer has exposure to the Eagle Ford Shale of Texas and Tuscaloosa Marine Shale of Louisiana. BMO Capital Markets thinks shares are worth $40, which is 15% above current prices.
QEP Resources (QEP) – Analysts at Raymond James raised their price target on this oil and gas explorer to $38. With shares currently trading at $32, this represents upside of 18%.
Bonanza Creek Energy (BCEI) – The independent oil and gas producer was given a “buy” rating with a $68 price target by Topeka MLV Capital. With shares currently trading at $53, Topeka’s target represents 28% upside.
There you have it…
As you can see, analysts made some big ratings changes this week. The share prices of many of the 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 that produce them. A recently initiated trade in Goodrich Petroleum (GDP) is reaching a peak gain of 700% this week!
Until Next Time,
Justin Bennett
Category: Commodity Trading
