Morgan Stanley Says Newfield Exploration Well Positioned For 2010 (NFX)
2/18/2010- Morgan Stanley analysts said that despite disappointing guidance from Newfield Exploration (NYSE: NFX), the company is still well positioned for 2010.
Analysts Stephen I. Richardson, Sameer Uplenchwar, Stuart Young, and Brian Lasky said, "Despite delivering another solid quarter operationally, 2010e production guidance at NFX fell short of street expectations. NFX expects 8-12% production growth (vs. initial expectations of 5-10%,) but street expectations had likely migrated to 12%+, in our view. The incremental increase in YoY capex ($150 mn) also likely contributed to street disappointment with guidance. Despite this, we continue to see NFX as well positioned to deliver a string of "beat and raise" quarters in 2010e based on a backlog of 25-35 wells in the Granite Wash and Woodford awaiting completions, contribution from deepwater GoM projects, and improving performance of legacy oil plays. Further, look for news flow from emerging plays to continue to support relative performance particularly in light of unchallenging relative valuation. 5.0x our 2010e EV/EBITDA."
Morgan Stanley maintains an "equal weight" rating on the stock. The bank sees fiscal 2010 EPS of $4.63,vs. the consensus estimates of $4.73.
Write to Chip Brian at cbrian@tradethetrend.com
---------------------------------------------------------------------------------------------
SmarTrend analyzes over 5,000 securities simultaneously throughout the trading day and provides its subscribers with trend change alerts in real time. To get a free trial of our trading calls and maximize your trading results, please visit http://www.TradeTheTrend.com
Get exclusive, actionable insight into how the market is expected to trend prior to market open with our free morning newsletter. Sign up at: http://www.TradeTheTrend.com/signup
