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UPDATE: Raymond James: Oil Prices, Oil Stocks 'Within Weeks Of Bottoming'


Pavel Molchanov of Raymond James believes that oil prices and energy stocks are within weeks of bottoming, regardless of the outcome from OPEC's upcoming meeting on Thursday.

“That certainly does not mean that we envision a huge near-term oil rally, but even a period of stabilization would support recovery in energy stocks, particularly given the prospect of sector rotation into energy and out of the recently outperforming S&P sectors,” Molchanov wrote in a note on Monday while issuing two upgrades and downgrades.

Hess, Occidental Petroleum Upgraded

Molchanov upgraded shares of Hess Corp. (NYSE: HES) to Outperform from Market Perform while shares of Occidental Petroleum Corporation (NYSE: OXY) were upgraded to Strong Buy from Outperform.

The analyst notes that Hess and Occidental Petroleum are “by no means the most aggressive oil stocks” but the companies are “highly oil-centric” and have underperformed amid the energy sector since the end of June.

Chevron, Exxon Downgraded

Molchanov downgraded shares of Chevron Corporation (NYSE: CVX) to Outperform from Strong Buy while shares of Exxon Mobil Corporation (NYSE: XOM) were downgraded to Market Perform from Outperform.

The analyst notes that the two companies are “among the world's most conservative energy investments” and have held up “quite well” in recent months. However, with a “less violent” commodity backdrop, shares are unlikely to outperform as investors develop an appetite for “more offensive-type” investments.

Latest Ratings for HES

Jan 2019BarclaysUpgradesEqual-WeightOverweight
Nov 2018Morgan StanleyMaintainsOverweightOverweight
Nov 2018Morgan StanleyMaintainsOverweightOverweight

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Posted-In: Chevron Exxon hess occidental petroleumAnalyst Color Upgrades Downgrades Analyst Ratings


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