What Do Analysts Expect for Upstream Energy Companies?

Rabindra Samanta - Author

Aug. 18 2020, Updated 6:36 a.m. ET

Moving average

EQT (EQT) and Cabot Oil & Gas (COG) are trading 1.5% and 1.4% above their respective 20-day moving averages. However, COG is trading at par to its 100-day moving average, while EQT is trading 2.5% below its 100-day moving average.

EQT and COG operate with production mixes of 90.7% and 95.5%, respectively, in natural gas. These two stocks are less sensitive to crude oil compared to natural gas.

The 100-day moving averages of upstream companies’ stocks have shown strong resistance. The ten large-cap upstream companies listed in the chart above are trading at an average of 21% below their respective 100-day moving averages.

Marathon Oil (MRO) is trading 48.2% below its 100-day moving average. It’s the highest among the upstream companies under consideration. In contrast, EOG Resources (EOG) and Pioneer Natural Resources (PXD) are both trading 11% below their respective 100-day moving averages.

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Wall Street analysts’ consensus estimates

The above table shows the moving averages and forward target prices of several US-based (SPY) upstream companies. Wall Street analysts’ consensus estimates suggest an average 44.2% upside for these upstream companies. You can compare that to the 54.8% upside estimate for large-cap refineries.

Over the next 12 months, EQT and Cabot Oil & Gas could rise by as much as 25% and 16%, respectively, from their current levels.

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

• Anadarko Petroleum could see a 55% rise.
• EOG Resources could see a 19% rise.
• Apache (APA) could see a 26% rise.


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