53% of Analysts Rate Spectra Energy a ‘Hold’ ahead of 1Q16 Earnings
Will Spectra Energy Keep Outperforming after 1Q16 Results?
Analysts’ recommendations
Of analysts surveyed by Bloomberg, 40% rate Spectra Energy (SE) a “buy” and 53% rate the stock a “hold.” Only 7% rate it a “sell.” The consensus target price for Spectra Energy is $33.2. Currently, its stock is trading at $31.7. If the stock reaches this target price within a year, it would mean a 5% price return for investors. Over the same period, the low and high target prices for the stock are $27 and $43, respectively. Spectra Energy forms ~1.7% of the Energy Select Sector SPDR ETF (XLE).
SE’s MLP Spectra Energy Partners (SEP) has a “buy” recommendation from 69% of surveyed analysts. 31% rate SEP a “hold.” None of the surveyed analysts rate SEP a “sell.” The median target price for SEP is $53.7.
The above table shows recommendations and target prices for Spectra Energy from some of the brokers surveyed. Among Spectra Energy’s peers, Kinder Morgan (KMI) received a “buy” rating from 47% of analysts surveyed. It received a “hold” rating from 47% of analysts. Of the analysts surveyed for Williams Companies (WMB), 45% issued a “buy” recommendation. It’s important to note that 88% of analysts surveyed rated Enterprise Products Partners (EPD) a “buy.”
Outlook for SE
SE’s moderate leverage, strong coverage, and strong guidance for the next three years make it an interesting company to watch.
Greg Ebel, Spectra CEO, said in the 4Q15 earnings release, “We continued to build on our solid natural gas transmission portfolio, which generates 90 percent of its revenue from long-term, fixed-fee contracts with high credit-quality customers and little volume risk. As a result of this stability, we are positioned to continue providing reliable and growing dividends for our investors, as demonstrated by the 14-cent per share increase for 2016 that we recently announced.”
Browse this series on Market Realist:
