Imperial Oil Trades Well below Its 100-Day Moving Average
Should Investors Consider Canadian Energy Companies?
Moving averages
Imperial Oil (IMO) is trading 5% below its 100-day moving average as of November 25, 2015. Since May 2015, IMO has struggled to meet its 100-day moving average. ExxonMobil (XOM) and Chevron (CVX) are trading 4% and 6%, respectively, above their 100-day moving averages, and Suncor Energy (SU) is trading 0.4% above its 100-day moving average.
The energy sector benchmark Energy Select Sector SPDR ETF (XLE) is trading 1.4% above its 100-day moving average and 0.5% below its 20-day moving average.
Moving averages are lagging indicators. They’re used to confirm existing trends. When an underlying asset price is above its long- and short-term moving averages, this indicates a rising trend and vice versa. Moving averages provide important support and resistance points for an underlying asset’s movement.
Wall Street analysts’ consensus estimates
Wall Street estimates suggest that ExxonMobil and Chevron may rise by an average of 4% over the next 12 months. They estimate a rise of 8.5% for IMO and 14% for SU. The current PE (price-to-earnings) ratios for ExxonMobil, Chevron, IMO, and SU are 17x, 18x, 23x, and 51x, respectively.
The estimated PE ratios for next year for ExxonMobil, Chevron, IMO, and SU are 20x, 21x, 19x, and 26x, respectively. Both analysts’ estimates and forward PE suggest that SU is relatively cheaper than ExxonMobil, Chevron, and IMO. The table above shows the moving averages and forward target prices of these integrated energy companies.
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