Market Overview

Credit Suisse's E&P Earnings Recap And Top 3 Stock Picks

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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.

Investors Interested

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.

Related Link: Morgan Stanley: Global Refinery Turnaround Is Good For These Oil Stocks

Top Picks

Given the uncertainty surrounding oil prices, analysts recommend investors take a defensive approach to the sector.

Low leverage and low cost assets make PDC Energy Inc (NASDAQ: PDCE), Diamondback Energy Inc (NASDAQ: FANG) and Gulfport Energy Corp (NASDAQ: GPOR) Credit Suisse's top stock picks in the space.

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

DateFirmActionFromTo
Jan 2021KeyBancMaintainsOverweight
Jan 2021KeyBancMaintainsOverweight
Jan 2021KeyBancMaintainsOverweight

View More Analyst Ratings for PDCE
View the Latest Analyst Ratings

 

Related Articles (PDCE + FANG)

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