As of January 5, 2016, the 100-day moving averages of upstream companies’ stocks showed strong resistance. For example, Pioneer Natural Resources (PXD) managed to trade above the 100-day moving average before December 15. Now, it’s trading 4.6% below its 100-day moving average. Also, EQT (EQT) and Cabot Oil & Gas (COG) were trading 19.7% and 17% below their 100-day moving averages, respectively, as of January 5. Upstream companies were also trading well below their 20-day moving averages except for EQT and COG.
Pioneer Natural Resources was trading above its respective 20-day moving average until December 15. Then, it fell 4% below the moving average. Also, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) was trading 21% below its 100-day moving average.
Wall Street analysts’ consensus estimate
The above table shows several upstream companies’ moving averages and forward target prices. Wall Street analysts’ consensus estimate suggests a 44% upside for these upstream companies compared to a 24% upside for large-cap refineries. Over the next 12 months, EQT and Cabot Oil & Gas could see rises of 52% and 45%, respectively, from the levels on January 5. Wall Street analysts’ estimates for three other upstream companies over the next 12 months are as follows:
- ConocoPhillips (COP) could see a 25% rise.
- EOG Resources (EOG) could see a 28.8% rise.
- Apache (APA) could see a 25% rise.
Interestingly, the forward PE (price-to-earnings) ratio for next year suggests that ConocoPhillips is comparatively cheaper than other upstream companies.
In the next part, we’ll discuss the production mix of these upstream companies.