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The Top 10 Upstream Stocks on the Street: What the Analysts Think

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Analysts’ recommendations

We’ll now turn to the Wall Street analysts’ targets for the top ten upstream companies by revenues. The following stocks had CFO (cash flow from operations) above $1.3 billion during the first nine months of 2017 (ended September 30):

Consensus recommendations

Noble Energy has the highest “buy” recommendations at ~48.4% of analysts, followed closely by ConocoPhillips and Anadarko with 47.62% and 45.45% “buy” recommendations, respectively. Continental has the highest “strong buy” recommendations at 34.37%.

If we add up the “buy” and “strong buy” recommendations, however, COP has the highest total number of recommendations across the “buy” category.

The highest percentage of “hold” recommendations goes to Apache, Marathon, and Antero, with 48.27% of the analysts giving APA a “hold,” and 48.14% and 48% of analysts giving MRO and AR “hold” recommendations, respectively.

Implied returns

AR, NBL, and APC have the highest implied returns or potential returns for the next 12 months based on their target prices. AR’s average analyst target price implies a return of 38.33%, while NBL’s and Anadarko’s average target prices imply returns of 26.03% and 19.93%, respectively.

The implied returns based on average target prices for APA, DVN, and MRO are ~10.17%, 9.70%, and 7.35%, respectively.

The lowest implied returns applied to EOG, COP, and CLR, whose potential returns over the next 12 months stand at 4.62%, 3.20%, and 0.13%, respectively. The company with the lowest implied return was Occidental, which has an implied return of -5.55% for the next 12 months.

In the next part of this series, we’ll compare the implied volatilities of these top ten upstream companies by CFO.

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