Market Overview

Miners Sell Off After Bonanza Creek Downgrade, Vale Partnership


Bonanza Creek Energy Inc (NYSE: BCEI) is down 15 percent in early trading Tuesday, on the back of recent downgrades and news within the space.

Northland Securities downgraded Bonanza last month from Outperform to Market Perform, and on Tuesday, Credit Suisse circulated a research note regarding the E&P sector, while downgrading Bonanza and EP Energy Corp (NYSE: EPE) from Outperform to Neutral.

Keeping the issue company in the red are other miners, likewise selling off.

Related Link: EP Energy, Bonanza Creek Selling Off After Credit Suisse Thesis

Another Piece Of Stock-Moving News

In addition to the early morning Credit Suisse downgrade, news of a Vale SA (ADR) (NYSE: VALE) - FORTESCUE METALS G NPV (OTC: FSUMF) partnership has been called "game changing" for the industry, according to Bloomberg.

"A pact between two of the world's largest iron ore producers promises to intensify competition among the sector's top four players," Bloomberg explained.

Such a move would create a goliath competitor against the likes of BHP Billiton Limited (ADR) (NYSE: BHP) and Rio Tinto plc (ADR) (NYSE: RIO).

However, Bloomberg cites Mike Henry, BHP's president of operations, as saying the partnership accord is not "something we would expect to impact us directly."

The ultimate goal of the partnership, according to Vale executive director Peter Poppinga, is to build "new platforms for future mine development and offering a new world-class alternative product to the Chinese steel industry."

The partnership would see Vale taking a 5–15 percent stake in Fortescue.

Stocks On The Move

  • Bonanza Creek Energy down 22.5 percent
  • Vale down 9.78 percent
  • Fortescue down 14.16 percent
  • Rio Tinto down 7.67 percent
  • BHP down 8.12 percent
  • EP Energy down 17.38 percent

Latest Ratings for EPE

Aug 2018KLR GroupTerminatesHold
May 2018KLR GroupDowngradesBuyHold
Mar 2018Johnson RiceInitiates Coverage OnHold

View More Analyst Ratings for EPE
View the Latest Analyst Ratings


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