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Energy Stocks: Analyzing the Underperformers Last Week

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Energy stocks

In the week ending February 22, upstream stock SM Energy (SM) fell 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)

In addition to US energy companies, a few foreign-headquartered integrated energy companies listed in the United States are also under review including Imperial Oil (IMO) and China Petroleum & Chemical (SNP).

On February 20, SM Energy reported an adjusted net loss of $0.18 per diluted share for the last quarter—on par with analysts’ consensus estimates. On February 22, Susquehanna reduced its target price on SM Energy by $2 to $21.

Other underperformers

Concho Resources (CXO) and Callon Petroleum (CPE) were second and third among the energy stock underperformers last week. XOP had the second-largest decline among major energy subsector stocks. On February 19, Concho Resources reported a net income of $0.94 per share for the last quarter—15.3% below analysts’ consensus estimates. On February 26, Callon Petroleum is expected to report an adjusted income of $0.20 per diluted share for the fourth quarter based on analysts’ consensus estimates—a fall of 4.7% on a sequential basis.

Ensco (ESV) and Transocean (RIG) were the fourth and fifth energy stock underperformers last week. OIH fell the most among the major energy subsector ETFs. On February 18, Transocean reported an adjusted net loss of $0.34 per diluted share for the last quarter—41.7% below analysts’ consensus estimates. In a press release on February 21, Ensco and Rowan Companies (RDC) “jointly announced that both companies’ shareholders voted to approve the pending all-stock transaction under which Rowan shareholders will receive 2.750 Ensco shares for each Rowan share they own.” On the same day, Ensco’s stock prices fell 2.3%.

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