4 Energy Stocks Cannacord Loves

To say that the energy sector has made for some tricky trading in the past couple of years would be quite an understatement, but Cannacord analysts have found four energy stocks that they love: Earthstone Energy Inc ESTE, Abraxas Petroleum Corp AXAS, Canadian Solar Inc. CSIQ and Ring Energy Inc REI.

Abraxas Petroleum
Abraxas has a presence in the Williston, Permian and Powder River Basins, as well as the Eagle Ford Shale. The company has been divesting non-core assets to shore up its balance sheet, and analyst Stephen Berman believes it will have plenty of liquidity and financial flexibility to weather the commodity slump.

Cannacord has a Buy rating and $2 price target on the stock.

Canadian Solar
Analyst Jed Dorsheimer has lowered Cannacord’s price target for Canadian Solar from $30 to $29, but maintains a Buy rating on the stock. He believes that near-term market confusion surrounding revenue recognition and timing of asset sales has resulted in the stock trading at a significant discount relative to the value of its assets.

Related Link: Bernstein Initiates Coverage On MLPs

Earthstone Energy
Berman believes that Earthstone has excellent positioning in the Eagle Ford Shale and possesses one of the better balance sheets among small cap U.S. E&P stocks. Canacord has lowered its price target from $17 to $16 but maintains its Buy rating.

Ring Energy
Out of all four names, Cannacord analyst Sam Burwell is most bullish on Ring. He believes that the company’s horizontal drilling program should “meaningfully boost growth and capital efficiency in 2017.”

Cannacord maintains a Buy rating on Ring but has raised its price target by 50 percent from $8 to $12.

Disclosure: the author holds no position in the stocks mentioned.