Analyzing Upstream Moving Averages after the Production Freeze



Moving averages

The ten large-cap upstream companies in the following table rose by an average of 0.4% even after Saudi Arabia and Russia agreed to a production freeze. These upstream companies are trading at an average of 21% below their 100-day moving averages. As of February 16, 2016, upstream stocks such as Devon Energy (DVN) and Marathon Oil (MRO) traded 41% and 48% below their respective 100-day moving averages. That’s the highest among upstream companies. EQT (EQT) was at par. Cabot Oil & Gas (COG) was 2.6% below its respective 100-day moving average.

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52-week high-low analysis

Large-cap upstream companies are at an average of 50% below their 52-week highs and 20% above their 52-week lows. Companies such as Devon Energy and Marathon Oil are 76% and 70% below their 52-week highs. Cabot Oil & Gas and Apache (APA) are 46% and 48% below their respective 52-week highs.

Wall Street analysts’ consensus estimates

Wall Street analysts’ consensus estimates suggest a 44% upside for these US-based (SPY) upstream companies. You can compare that to 51.5% upside estimates for large-cap refineries. Over the next 12 months, EQT and Cabot Oil & Gas could rise by as much as 23% and 19%, respectively, from the current levels.

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

  • Hess could see a 36% rise.
  • ConocoPhillips (COP) could rise by 38%.
  • Apache could see a 23% rise.

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