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Upstream Companies: Moving Averages and Analysts’ Estimates

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Jan. 19 2016, Updated 7:58 a.m. ET

Moving averages

As of January 15, 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, 2015. Now, it’s trading 13.3% below its 100-day moving average. Also, EQT (EQT) and Cabot Oil & Gas (COG) were trading 17% and 20% below their 100-day moving averages, respectively, as of January 15.

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EQT and Cabot Oil & Gas operate with production mixes of 90% and 95%, respectively, in natural gas. Upstream companies were also trading well below their 20-day moving averages, except for EQT. COG was trading above its 20-day moving average. Now, it’s below the moving average. During the same period, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) was trading 27.3% below its 100-day moving average.

Wall Street analysts’ consensus estimates

The above table shows several upstream companies’ moving averages and forward target prices. Wall Street analysts’ consensus estimates suggest a 66.5% upside for these upstream companies—compared to the 37.4% upside estimates for large-cap refineries. In Part 7 in this series, we’ll discuss analysts’ estimates for large-cap oil refining companies. Over the next 12 months, EQT and Cabot Oil & Gas could see rises by as much as 45% and 42%, respectively, from the levels we saw on January 15.

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

  • ConocoPhillips (COP) could see a 41.5% rise.
  • EOG Resources (EOG) could see a 37.4% rise.
  • Apache (APA) could see a 43% rise.
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