| Wednesday | ||||
Piper Sandler analyst… Piper Sandler analyst Mark Lear downgraded EOG Resources to Neutral from Overweight with a price target of $39, down from $113, after taking over coverage of the name. We have yet to witness the worst of the current oil market turmoil play out in the physical markets, Lear tells investors in a research note. As such, the analyst says it is "time to play defense" with respect to Exploration and Production stocks. | ||||
| Tuesday | ||||
Check out this… | ||||
Piper Sandler analyst… Piper Sandler analyst Ryan Todd downgraded EOG Resources to Neutral from Overweight with a $39 price target. | ||||
| Over a week ago | ||||
BofA analyst Doug Leggate… BofA analyst Doug Leggate double upgraded Chevron (CVX) to Buy from Underperform while also upgrading EOG Resources (EOG), Noble Energy (NBL) and Devon Energy (DVN) - all to Buy from Neutral - as his initial response to the current situation of "supercontango" in the oil market was to lower the majority of stocks to Neutral pending clarity and before knowing the extent of the selloff. His revised stress case leads him to believe some names have moved too far, although he has "no interest in calling a floor," Leggate tells investors. However, lower growth means lower absolute free cash, which leads him to downgrade Concho Resources (CXO) to Neutral from Buy and to downgrade Cimarex Energy (XEC) to Underperform from Neutral. | ||||
BofA analyst Doug Leggate… BofA analyst Doug Leggate upgraded EOG Resources to Buy from Neutral. | ||||
MKM Partners analyst John… MKM Partners analyst John Gerdes upgraded Laredo Petroleum (LPI), Comstock Resources (CRK), and Apache (APA) to Buy from Neutral, saying the decline in oil prices from the OPEC/Russia price war and the simultaneous negative COVID-19 demand shock have created a "generational" value opportunity. The analyst notes that while his FY20 NYMEX oil price forecast is lowered to $22 from $34, he sees FY21 at $45 and his FY22+ outlook is unchanged at $55. Using the criteria of investment attractiveness derived from diferential full-cycle returns, competitive equity value upside, and modest financial leverage, Gerdes is most positive on EOG Resources (EOG), Diamondback (FANG), and Parsley Energy (PE). | |
Raymond James analyst… Raymond James analyst John Freeman lowered the firm's price target on EOG Resources to $50 from $78 and keeps an Outperform rating on the shares. EOG remains a strong operator with a high-quality acreage position, Freeman says, adding that he is encouraged by the company's commitment to shareholder returns and the ability to still grow production slightly while living within cash flow at the currently depressed strip. | |
EOG Resources updated its… EOG Resources updated its full-year 2020 capital plan as a result of the significant decline and increased volatility of commodity prices. Exploration and development expenditures for 2020 are now expected to range from $4.3B-$4.7B, including facilities and gathering, processing and other expenditures, and excluding acquisitions and non-cash exchanges. Net cash from operating activities is expected to fund both capital expenditures and dividend payments assuming mid-$30 oil prices for the remainder of 2020. The revised capital plan supports full-year 2020 crude oil production of 446,000-466,000 barrels of oil per day, approximately flat compared to full-year 2019 levels. Given the current commodity price environment, EOG has elected to reduce activity across its operating areas. The company plans to focus its drilling operations in the Delaware Basin and South Texas Eagle Ford and continue funding projects that support the long-term value of the company, including targeted infrastructure, exploration and environmental projects. "Our first priority is to generate high returns with every dollar we spend even at low oil prices," said William "Bill" Thomas, Chairman and CEO. "EOG's premium drilling strategy is the most strict reinvestment hurdle rate in the industry. With oil around $30 our 2020 premium drilling program is expected to generate more than 30% direct after-tax rate of return. Our commitment to reinvesting at high returns never wavers." | |
Exploration &… Exploration & Production and Oilfield Services Mini-Conference will be held in Houston on March 10-11. | |
Catch up on today's… Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Carnival (CCL) downgraded to Neutral from Buy at Goldman Sachs with analyst Stephen Grambling saying the overall gaming/leisure stocks have fallen about 60% since the first cases of coronavirus outside of China were reported, and while these shifts embed a "downside scenario comparable to the Great Recession," the initial reads across the travel sector suggest an "uncharted territory," and warrant a below-average multiple for the foreseeable future. 2. Xylem (XYL) downgraded to Underperform from Neutral at Credit Suisse with analyst John Walsh saying he expects the stock to underperform relative to the sector as global markets stabilize, which he expects to happen over the next 12 months. 3. Lincoln National (LNC) downgraded to Neutral from Overweight at Piper Sandler with analyst John Barnidge saying he believes investors will ascribe a lower multiple going forward to companies that have a large variable annuity business given the changing interest rate environment. 4. EOG Resources (EOG) downgraded to Equal Weight from Overweight at Wells Fargo with analyst Nitin Kumar saying he sees a more balanced risk/reward profile after taking a more neutral view of the company's inventory life. 5. Camden Property (CPT) downgraded to Neutral from Buy at BTIG with analyst James Sullivan citing slower renter demand and increasing supply in the REIT's markets, with Houston potentially headed for flat or negative same-store revenue growth given the collapse in oil prices. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here. |