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Credit Suisse Upgrades Hess After Reaching Price Target

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Hess Corp. (NYSE: HES) has seen its stock trade lower by 11 percent since the start of 2018 and 22 percent in the past two weeks alone, which prompted Credit Suisse to exclaim "enough is enough" in an upgrade note.

The Analyst

Credit Suisse's William Featherston upgraded Hess from Underperform to Neutral with an unchanged $42 price target.

The Thesis

Hess' stock has fallen over the past few weeks due to a combination of company-specific news including a lower than expected production guidance for 2018 and a general selloff in oil prices and stocks, Featherston said. The stock's valuation now appears to be "fair" and the analyst's negative thesis has largely played out, including the Street revising their 2018 production estimates lower as they were too high.

In fact, there are now three potential catalysts to support Hess' stock ahead, including:

  • Exploration results in Guyana and success in tests could increase the 3.2 BBoe of gross resource discovered to date;
  • Activist investor Elliott Management could push the company to pursue shareholder friendly measures; and
  • Better than expected production with Enchilada platform is expected to be restored in June.

Price Action

Shares of Hess were trading higher by more than 4 percent Monday.

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Latest Ratings for HES

DateFirmActionFromTo
Sep 2018Morgan StanleyMaintainsOverweightOverweight
Sep 2018Bank of AmericaMaintainsBuyBuy
Aug 2018KLR GroupTerminatesHold

View More Analyst Ratings for HES
View the Latest Analyst Ratings

Posted-In: Credit Suisse Oil oil prices William William FeatherstonAnalyst Color Upgrades Analyst Ratings

 

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