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Noble Energy Named 'Top Pick' At This Research Firm

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  • Noble Energy, Inc. (NYSE: NBL) shares are down 27 percent year-to-date, having declining steadily since mid-April.
  • Cowen & Co’s Charles Robertson maintained an Outperform rating on the company, with a price target of $52.
  • While the Israeli gas framework plan may be approved in 2015, the company’s shares do not adequately reflect upside from this, Robertson mentioned.

During an interview over the weekend, the Israeli economy minister offered to quit the ministry to allow for the appointment of another minister who is willing to endorse the gas framework plan. This would allow the government to avoid the Israeli Antitrust Authority review prior to the enactment of the plan.

Analyst Charles Robertson wrote, “We would use any weakness on Humpback exploration to buy. Based on Falkland Oil & Gas (FOGL) comments, the primary objective is likely non-commercial; however, NBL is deepening the well to test for additional targets.”

The gas framework approval is now likely within weeks, Robertson said. Cowen’s model estimates Noble Energy’s 3Q exploration expense at $210MM, versus the guidance of $150MM - $200MM.

Robertson believes Noble Energy would receive a distribution “in addition to equity shares for their midstream assets based on the use of proceeds section in the S-1 filed earlier this week.”

The MLP provides additional capital and Noble Energy could expect a payout of $175MM - $250MM, leaving the leverage ratio of Noble Midstream Partners in-line with peers.

Robertson cited Noble Energy as one of the Top Picks, while adding that the shares are pricing in only around $2 for the Israeli upside. Recent news reports support the gas framework being approved in 2015. “We see limited downside and 33-67% upside from here.”

Latest Ratings for NBL

Dec 2017Credit SuisseInitiates Coverage OnOutperform
Nov 2017BarclaysMaintainsOverweight
Nov 2017BarclaysMaintainsOverweight

View More Analyst Ratings for NBL
View the Latest Analyst Ratings

Posted-In: Charles Robertson Cowen & Co VetrAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas


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