Wall Street analyst ratings for Southwestern Energy
As of March 17, 2016, about 65% of Wall Street analysts have rated Southwestern Energy (SWN) as a “buy” and ~18% of analysts have rated it as a “hold.” That leaves 17% with “sell” ratings for the stock. The median price target from these recommendations is $8.84, which is ~9% higher than the closing price of $8.1 for SWN on March 17.
By comparison, based on the median price targets of recommendations from Wall Street analysts, Anadarko Petroleum (APC), Diamondback Energy (FANG), Cabot Oil and Gas (COG), and Devon Energy (DVN) have potential upsides of ~17%, ~9%, ~9%, and ~23%, respectively, from their closing prices on March 17. The SPDR S&P Oil and Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies, whereas the Vanguard Energy ETF (VDE) invests into the broader energy market.
SWN’s individual recommendations
As shown in the above table, the most recent recommendation of “Sector Perform” comes from Scotia Howard Weil, which issued its rating on March 17, 2016. Scotia Howard Weil assigned SWN the target price of $6.5 in the next 12 months, which is ~20% lower than the closing price of $8.1 on March 17.
By comparison, Bernstein assigned SWN the highest target price of $14, which is ~73% higher than the stock’s closing price of $8.1 on March 17. Bernstein issued its SWN recommendation on March 16 but did not mention a target date.
In contrast, Morgan Stanley assigned SWN the lowest target price of $3, which is ~63% lower than the stock’s closing price of $8.1 on March 17. Morgan Stanley issued its SWN recommendation in the last week of February and expects to see this target price in 12 months.
Wall Street analysts say that some of the positives for SWN’s stock are better production growth, cost reduction focus, and meaningful upside potential if natural gas prices recover.