Last Week, Upstream Stocks Outperformed the Energy Space



Energy stocks

Between January 11 and January 18, oilfield services stock Rowan Companies (RDC) rose the most among the energy stocks under review in this series, which include the following ETFs:

  • the Alerian MLP ETF (AMLP)
  • the Energy Select Sector SPDR ETF (XLE)
  • the VanEck Vectors Oil Services ETF (OIH)
  • the VanEck Vectors Oil Refiners ETF (CRAK)
  • the SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

OIH rose the most among major energy subsector ETFs. On January 17, JPMorgan Chase slashed its price target on RDC by $4 to $15.

In addition to US energy companies, the following foreign-headquartered integrated energy companies are also listed in the United States:

Other strong performers were upstream stocks

Upstream stocks Gulfport Energy (GPOR), SM Energy Company (SM), Chesapeake Energy (CHK), and Whiting Petroleum (WLL) were the second-, third-, fourth-, and fifth-largest gainers among our selected energy stocks last week. Among major energy ETFs, XOP was the second-largest gainer.

On January 17, GPOR announced its capital budget outlay for 2019. GPOR’s net production could be between 1,360 MMcfe (million cubic feet equivalent) and 1,400 MMcfe per day in 2019, on par with its fourth-quarter average production. Moreover, GPOR has planned for capex of $565 million–$600 million this year, all of which will be generated from its cash flow.

On January 18, CHK announced that it would be reporting its fourth-quarter earnings results on February 27. Analysts’ consensus estimate suggests that CHK will report adjusted EPS of $0.18, just $0.01 below its EPS in the previous quarter.

Energy commodities and the broader market

Moreover, the broader market’s rise and oil’s recovery may have boosted the above-mentioned energy stocks, which also beat oil and the broader market last week. US crude oil March futures rose 4.1%, natural gas February futures rose 12.4%, and the S&P 500 Index (SPY) rose 2.9%. In the next article, we’ll discuss the top underperformers in the energy sector last week.

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