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Cabot Oil & Gas: What Do Wall Street Analysts Recommend?

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Analysts’ recommendations

Among the 30 analysts tracking Cabot Oil & Gas (COG), according to data compiled by Reuters, 50% have given it “buys,” 43% have given it “holds,” and only 7% have given it “sells.”

On May 15, JPMorgan Chase reduced its target price on COG by $1 to $29. On May 14, BMO increased its target price on COG by $1 to $31. On May 24, COG closed at $25.70.

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Stock prices defied weak energy commodities in May

In May so far, COG has fallen just 0.7%. In this same period, the S&P 500 Index (SPY) has fallen 4.1%, while US crude oil and Henry Hub natural gas active futures have fallen more than 8%. COG operates with a production mix of 100% in natural gas. Improvement in transportation infrastructure and rising demand near its production location have helped the company increase its price realization.

Cabot Oil & Gas’s realized natural gas sale price was $3.35 per thousand cubic feet including hedges—7.7% higher on a sequential basis despite a 23.1% decline in Henry Hub natural gas active futures. Moreover, in the first quarter, Cabot Oil & Gas’s EPS were $0.73—12.3% higher than analysts’ consensus estimate. COG also reduced its operating expenses by over 20% in the last quarter on a sequential basis.

Mean target price

Analysts’ mean target price of ~$28.9 for COG implies a potential ~12.4% upside based on its last closing price. In comparison, Chesapeake Energy (CHK) and Gulfport Energy’s (GPOR) target prices suggest 55.3% and 77.4% increases, respectively.

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