Credit Suisse's E&P Earnings Recap And Top 3 Stock Picks
Credit Suisse recently gave a recap of 4Q14 earnings season for the exploration and production (E&P) sector. Analysts updated their ratings and price targets for 12 names in the space.
The stock market is near all-time highs, and the lagging energy sector is one place that investors are looking for potential upside.
According to a Credit Suisse survey, E&P and refiner stocks are drawing particular interest from investors.
Oil Recovery Already Priced In
Analysts concede that crude oil may be near its bottom for this cycle. However, they believe that a sharp recovery in oil prices is already priced into many E&P stocks.
Analysts address this sharp recovery in oil prices, which they "fear may take longer to materialize given the sharp drop in capital costs."
Service providers have already lowered costs significantly, but analysts believe that total cost reductions could reach 30 percent if the $50/bbl price environment persists.
Given the uncertainty surrounding oil prices, analysts recommend investors take a defensive approach to the sector.
Credit Suisse also updated ratings and price targets for the following 12 stocks:
- Antero Resources Corp (NYSE: AR)-Outperform; $53 target
- Bonanza Creek Energy Inc (NYSE: BCEI)-Outperform; $35 target
- Carrizo Oil & Gas Inc (NASDAQ: CRZO)- Neutral; $50 target
- Gulfport Energy Corp- Outperform; $64 target
- Magnum Hunter Resources Corp (NYSE: MHR)-Outperform; $3 target
- Penn Virginia Corp (NYSE: PVA)-Outperform; $7 target
- Range Resources Corp (NYSE: RRC)-Outperform; $87 target
- Rosetta Resources Inc (NASDAQ: ROSE)-Outperform; $24 target
- Rex Energy Corp (NASDAQ: REXX)-Neutral; $4 target
- Sanchez Energy Corp (NYSE: SN)-Outperform; $17 target
- Swift Energy Co (NYSE: SFY)- Underperform; $1 target
- Whiting Petroleum Corp (NYSE: WLL)-Neutral; $41 target
Latest Ratings for PDCE
|Oct 2016||Mizuho Securities||Initiates Coverage on||Neutral|
|Sep 2016||Canaccord Genuity||Maintains||Buy|
|Aug 2016||Seaport Global||Upgrades||Neutral||Buy|
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.