19 Feb

Top Losses in the Energy Space Last Week

WRITTEN BY Rabindra Samanta

Energy stocks

In the week ending February 15, oilfield services stock McDermott International (MDR) 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)

Top Losses in the Energy Space Last Week

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 13, McDermott International announced that “For the fourth quarter of 2018, McDermott expects to report an adverse change in estimate of approximately $168 million, due to unfavorable labor productivity, and increases in subcontract, commissioning and construction management costs.” On the same day, the stock fell 26.6%.

Other underperformers

Weatherford International (WFT) had the second-largest decline among energy stocks last week. However, OIH was the second-largest loss among the major energy subsector ETFs. In the week ending February 15, Weatherford International fell after outperforming the energy space for three consecutive weeks. Profit-booking could have dragged the stock.

Callon Petroleum (CPE) was the third-largest loss among energy stocks. On February 12, Callon Petroleum fell 8.5%. On the same day, the company announced its 2019 outlook. In 2019, Callon Petroleum’s production growth is expected to be 20% more than analysts’ consensus estimates for 2018. Based on the company’s guidance, its operational capital expenditure might be between $500 million and $525 million in 2019. Callon Petroleum underperformed energy stocks despite more than a 5% rise in US crude oil prices on February 8–15. On February 13, RBC reduced the target price on the stock by $1 to $10. On the same day, Imperial Capital increased its target price on Callon Petroleum by $3 to $15.

YPF Sociedad Anonima (YPF) and BP (BP) had the fourth and fifth-largest losses among energy stocks last week.

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