Forecast price range for Andeavor stock until October 1
In the previous part, we discussed Andeavor’s (ANDV) moving averages, which implied that ANDV stock isn’t close to being in the bearish zone. Now, we’ll consider its implied volatility to forecast its stock price range until October 1, the expected closing date for the acquisition process by Marathon Petroleum (MPC).
Implied volatility in ANDV has fallen by seven percentage points from July 2 to the current level of 18.0%. In the same period, ANDV stock has risen 16.0%. So, there appears to be a general inverse relationship between implied volatility and the stock’s price.
Considering ANDV’s implied volatility of 18.0%, Andeavor’s stock price could close between $146.30 and $160.30 for the 24-day period ending October 1. This assumption considers a normal distribution of prices, a standard deviation of 1.0, and a probability of 68.2%.
According to the announced merger deal with Marathon Petroleum (MPC), ANDV shareholders could elect to receive 1.87 MPC shares or $152.30 in cash per ANDV share, subject to the 15.0% cap of equity consideration.
Implied volatilities in ANDV’s peers
Implied volatilities in Valero Energy (VLO), Phillips 66 (PSX), and HollyFrontier (HFC) have fallen by six percentage points, five percentage points, and seven percentage points, respectively, in the same period. VLO stock has risen 5.0%, PSX stock has risen 3.0%, and HFC stock has risen 4.0% in this period.
Here, the stock prices and implied volatilities indicate an inverse relationship. The implied volatilities in VLO, PSX, and HFC stand at 24.0%, 19.0%, and 33.0%, respectively.
In the next part, we’ll look at ANDV’s dividend yield trend.