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Analysts’ Ratings for Vanguard Natural before Its 4Q15 Results

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Analysts’ ratings for Vanguard Natural Resources

In this article, we’ll look at what Wall Street analysts recommend for Vanguard Natural Resources (VNR). At a broader level, 60% of analysts surveyed by Bloomberg rate Vanguard Natural Resources a “hold,” 30% rate it as a “buy,” and the remaining ~10% rate it a “sell.”

The median target price of $2.75 for Vanguard Natural Resources (VNR) implies a ~26.7% return from its February 22, 2015, closing price of $2.17. VNR’s peers EV Energy Partners (EVEP) and Breitburn Energy Partners (BBEP) have “buy” ratings from 71.4% and 72.7% of analysts surveyed, respectively.

Plus, 88.9% of analysts rated Linn Energy (LINE) as a “sell.” VNR forms 3.37% of the First Trust ISE-Revere Natural Gas Index ETF (FCG).

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Individual ratings for VNR

Here are some of the recent analyst ratings for VNR:

  • Ladenburg Thalmann & Co., Janney Montgomery Scott LLC, UBS, and J.P. Morgan have rated VNR as “neutral.”
  • Hilliard Lyons has rated VNR as a “long-term buy” and has assigned it a most optimistic price target of $25.
  • Stifel has rated VNR as a “sell” has assigned it a pessimistic price target of $1.
  • FBR Capital Markets and Raymond James have rated VNR an “outperform,” which is equivalent to “buy.” They have assigned price targets of $3.50 and $6, respectively.

Vanguard Natural Resources’ outlook

In the short run, Vanguard Natural Resources’ (VNR) outlook seems bleak considering the recent slump in crude oil and natural gas prices with no signs of recovery. As of September 30, 2015, only 68% of VNR’s gas production, 50% of crude oil production, and 21% of NGLs production is hedged for 2016.

Recently, Linn Energy announced that it has “initiated a process to explore strategic alternatives to strengthen its balance sheet and maximize the value of the Company.” Following this news, investors dumped Linn’s unit, fearing this process could be a bankruptcy filing. The sustained low price environment is definitely a challenge for smaller upstream players, like VNR and LINE.

For more pre-earnings coverage on midstream and upstream MLPs, please check out our Master Limited Partnerships page.

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