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Upstream Companies’ Moving Averages and Analyst Estimates

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Most upstream companies are trading just below their moving averages

As of January 12, 2016, the 100-day moving averages of upstream companies’ stocks showed strong resistance. For example, Pioneer Natural Resources (PXD) managed to trade above its 100-day moving average before December 15. Now, it’s trading 13.3% below its 100-day moving average. Also, EQT Corporation (EQT) and Cabot Oil & Gas Corporation (COG) were trading 21% and 25% below their 100-day moving averages, respectively, as of January 12. 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, at which point it fell by 8.5% below its 20-day moving average. During the same period, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) was trading 25.2% below its 100-day moving average.

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Wall Street analyst consensus estimates still suggest an upside

The above table shows several upstream companies’ moving averages and forward target prices. Still, Wall Street analyst consensus estimates suggest a 64% upside for these upstream companies, compared to the 28% upside these estimates for large-cap refineries (see Part 7 of this series for the analyst estimations of large-cap oil refining companies). Over the next 12 months, EQT and Cabot Oil & Gas could see rises of as much as 53% and 55%, respectively, from the levels we saw on January 12.

Wall Street analyst estimates for three other major upstream companies over the next 12 months are as follows:

  • ConocoPhillips (COP) could see a 41% rise.
  • EOG Resources (EOG) could see a 38% rise.
  • Apache Corporation (APA) could see a 44% 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 of this series, we’ll discuss the moving averages and analysts estimates of downstream companies.

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