|Bid||3.3500 x 38800|
|Ask||3.3600 x 36100|
|Day's Range||3.2800 - 3.4450|
|52 Week Range||3.2800 - 8.5500|
|Beta (5Y Monthly)||1.59|
|PE Ratio (TTM)||3.29|
|Earnings Date||Feb 23, 2020 - Feb 27, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Jun 24, 1998|
|1y Target Est||7.71|
Of the additional $200-billion purchase of U.S. goods over the next two years (keeping 2017 imports as the base level), $52.4 billion will likely come from the energy sector.
Markets finished last year on a high note, with annual gains between 22% on the Dow Jones and 35% on the NASDAQ. But just because the markets overall did well, it does not mean that every individual stock saw big gains. Energy stocks, in particular, had a difficult year.According to David Rosenberg, chief economist and strategist of Rosenberg Research and Associates, “In a world where everything looks so expensive, energy stocks look downright cheap.” At the same time, he sees the current low prices as a prime time to buy in. He believes that energy stocks are ready for gains.Defending this belief, Rosenberg points out several factors. First, that US shale companies, which have underperformed the markets due to low oil prices, are working hard to bring investors back in. These companies need capital infusions to maintain operations, and their best path to that is finding a way to push share prices back up.Second, the sudden easing of US-Iran tensions in the Middle East has eased fears of renewed conflict that could constrict the flow oil in world trade. While such tensions would inflate oil prices, their easing promotes safer shipping and renewed exploration in the theater – both better for the industry in the long run.As Rosenberg puts it, “In the energy space… all that has to happen is for something bad not to happen and there will be a positive rerating as the end-result.”TipRanks, a company that collects and collates reams of real-time information on Wall Streets publicly traded stocks – and analysts – has the data necessary to test this hypothesis. Setting the Stock Screener filters to show only stocks from the basic materials sector, with a Strong Buy analyst consensus and upside potential of 20% or more, we picked three energy stocks that Wall Street’s agree are ready to start climbing.Callon Petroleum Co. (CPE)We’ll start with Callon Petroleum, a small-cap oil and gas exploration and development company focused on the Permian Basin of West Texas. Over the past decade, the Permian formation has become North America’s largest proven energy reserve and has pushed the US into position as the world’s top oil producer.Over the course of 2019, while the oil industry was ramping up production, low prices put a damper on profits. CPE shares slipped 26% during the year on falling revenues.The falling revenues and share depreciation came even as the company was managing to beat analyst expectations on reported earnings and revenues. In Q3, the most recent reported, CPE showed EPS of 19 cents, 5.5% above expectation, and revenues of $155.4 million, 2% over the forecast. It was the third time in a year that CPE had beaten the EPS forecast.This could explain CPE’s positive indication from TipRanks’ measurement of investor sentiment. Purchases of the stock are up in both the past 30 days and the past week – a very positive sign for Callon.The company caught the attention of RBC Capital analyst Brad Heffern. Heffern was attracted by Callon’s placement in Texas’ most productive oil region, as well as the company’s potential for increasing free cash flow. He wrote, “We like the company's strong asset positions in the Permian and Eagle Ford Basins… we think CPE has successfully transitioned from a Permian pure play growth story, to sustainable corporate return model with asset diversification, centered around sustainable growth and free cash flow generation. As CPE transitions to a free cash flow model, we would expect the company to… ultimately consider implementing a dividend or returning cash to shareholders through a repurchase program.”Heffern put a Buy rating on CPE, with an $8 price target. His target suggests room for an eye-opening 94% upside growth potential this year. (To watch Heffern’s track record, click here)Currently, Callon sells for $4.22, a bargain price. The average price target of $7.33 shows the stock’s potential – an impressive 74% upside. The Strong Buy analyst consensus rating is based on 8 Buys against a single Hold. (See Callon’s stock analysis at TipRanks)QEP Resources, Inc. (QEP)Our second stock, QEP, is another exploration and development company, working in crude oil, natural gas liquids, and dry gas deposits. With headquarters in Denver, Colorado, QEP has oil and gas operations in both the Texas Permian Basin and North Dakota’s Williston Basin.Ending 2018, QEP had proven reserves of 658 million barrels of oil equivalent, and in Q3 2019 produced 8.4 million barrels. The production breakdown for the quarter was 67% oil, 16% natural gas liquids, and 17% dry gas. During the same quarter, QEP bet the forecasts on EPS despite slowing production outputs. QEP had a strong cash position at the end of Q3, also, with $92.4 million on hand and borrowing against its revolving credit line.QEP shares dropped steadily in 2019, but turned up sharply in December. That gain mitigated the year’s loss, holding it to 21%. The recent tensions in the Middle East hurt the oil industry generally, including QEP shares – but QEP has not lost as much in January as it had gained the month before.Piper Sandler analyst Kashy Harrison was impressed with QEP’s overall position. Harrison believes the company has a solid foundation to improve the balance sheet, and that its prospects going forward depend more on management execution than anything else. He writes, “We think QEP looks cheap as long as it executes on the forward outlook. Notably, recent execution from new management coupled with a conservative approach toward forward guidance improves our confidence in the outlook… We expect FCF generated in the near-term will primarily clean up the balance sheet…”Harrison’s Buy rating is backed up with a $6 price target, indicating room for a 54% upside. (To watch Harrison’s track record, click here)Like CPE above, QEP sells for a bargain price – this time, just $3.89. The average price target of $5.63 suggests room for a robust 44% upside. The Strong Buy analyst consensus rating is based on 4 reviews, including 3 Buys and 1 Hold. (See QEP’s stock analysis at TipRanks)Goodrich Petroleum Corporation (GDP)Third on our list is a micro-cap company, of just $105 million market cap, based in Texas and Louisiana. Unlike the companies above, Goodrich does not operate in the Permian Basin– it is focused on the Eagle Ford formation of East Texas. The company also has operations in Louisiana, where the majority of its operations are focused on natural gas exploitation in the Haynesville Shale.Goodrich saw strong production in Q3 2019, the most recent reported, with natural gas output reaching 136 million cubic feet per day in the quarter. This was a 61% year-over-year increase. Earnings came in at 14 cents per share based on $2 million net income, missing the forecasts however. The company’s higher output overbalanced lower gas prices to generate the positive earnings and avoiding a net loss.The third quarter may have been adequate, but 2019 as a whole was not good for GDP shares. The stock lost 32% during the year, and has started 2020 with further losses. The result is an energy company with a depressed share price – and rising output on expanding exploration areas. This solid base has attracted attention from Wall Street analysts.Writing from Roth Capital, John White is impressed with Goodrich’s management. He said, after the quarterly earnings call, “[The] 2020 plan continues GDP’s allstar execution and prudent management practices, focused on cash flow and balance sheet strength while still achieving production growth.”White puts an $18 price target on GDP, implying a whopping 110% upside growth potential and supporting his Buy rating. (To watch White’s track record, click here)Northland’s Jeff Grampp agrees that GDP is a Buy proposition. He weighed in at the same time, and wrote, “The company's 2020 development program assumes 13 gross (5.8 net) wells are placed to sales (72% of net wells operated) with an average lateral length of 8,500 feet… We think the new guidance implies an attractive financial position for GDP. FCF is expected… to yield ~16% at the midpoint. Additionally, leverage is expected to end 2020 at ~1x and there is solid downside protection with 45%-50% of natural gas production hedged.”Grampp’s Buy rating is supported by a $13 price target – which indicates his confidence in 51% growth to the upside. (To watch Grampp’s track record, click here)Goodrich has a unanimous Strong Buy consensus rating, based on 3 Buy reviews from Wall Street. Shares are cheap, at just $8.56, and the $15 average price target suggests an upside potential of 72% – most impressive indeed. (See Goodrich’s stock analysis at TipRanks)
Moody's Investors Service ("Moody's") affirmed Callon Petroleum Company's (Callon) ratings, including its B1 Corporate Family Rating (CFR), B1-PD Probability of Default Rating (PDR) and B2 ratings on the four issues of senior unsecured notes. The outlook is stable.
Schlumberger's (SLB) Reservoir Characterization and Drilling segments are expected to have generated lower earnings in the fourth quarter than the year-ago period.
The Zacks Analyst Blog Highlights: Callon Petroleum, Diamondback Energy, Pioneer Natural Resources and Concho Resources
(Bloomberg) -- The slowdown in U.S. oil production growth is rippling through all aspects of life in West Texas -- even religion.Demand for a custom bible aimed at oil workers is declining in the Permian Basin, the world’s biggest shale patch. It’s yet another effect of the downturn in the region, which has led to a reduction in jobs, rig counts, hotel proceeds and home sales.Last year, the Oilfield Christian Fellowship shipped about 16,000 bibles across its 11 chapters in the U.S., Canada and Venezuela. That’s down by about a third from its normal annual volume, mainly due to a drop in North American working rigs, according to Mike Chaffin, the non-profit group’s head of bible supply.Religious groups have focused on getting their message to so-called man camps that sprouted as makeshift housing for oil workers across the Permian. About 40% of the Oilfield Christian Fellowship’s bibles -- titled “God’s Word for the Oil Patch: Fuel for the Soul” go to the region, versus 25% just a couple years ago.Nowhere else in America do oil and religion intertwine more than in West Texas, the heart of the Permian. At one desolate spot along the highway between Midland and Odessa sits a 30-foot cross bathed in bright light.Next to it, the Ten Commandments are etched into a stone tablet and a plaque thanks Callon Petroleum Co. for providing electricity from its nearby oilfields to illuminate the structure.The Permian chapter of Oilfield Christian Fellowship hosts a monthly lunch-hour devotion session at a facility in a 250-acre swath of land not far from Callon Petroleum’s oil wells. The site’s entrance is marked by a tall cross fashioned from leftover oilfield pipe. The meetings are part of its effort to reach isolated field hands.“Oilfield workers are disconnected from their families,” said Hollas Hoffman, who was one of the first to organize an effort to minister to field hands in Texas. “When they get off work, they either go to bed or they go to a bar. That’s the general rule.”His outreach program, which was endorsed by the Baptist General Convention of Texas as chaplains to oilfields, started just as the shale boom was beginning to ramp up last decade.For the chief executive officer of WPX Energy Inc. -- which has a market capitalization of $5.6 billion and operates in the Permian -- the region’s connection to the divine is clear.“I want to drive this point home: God’s hand has been very very evident with everything we’ve been able to accomplish,” Rick Muncrief said at a prayer event in May organized by the Oilfield Christian Fellowship. The “good Lord has smiled on us several times,” he said.While the downturn in the Permian may hamper plans to minister to far-flung field hands, some expect the slowdown to boost church attendance.West Texas is estimated to have about 500 churches -- ranging in size from 50 to over 1,000 per service. Some are bursting at the seams, such as Midland’s Stonegate Fellowship, which bought a popular bar in Odessa and turned that into its second place of worship.“A lot of times, when oil is booming and people are making a lot of money, God is the last thing on their mind,” said Jason Hatch, a pastor at Redeemer Church in Midland. “Then when oil takes a plummet, and it actually changes people’s lives, it makes them think about deeper, long-term things other than a new Ford F-150.”To contact the reporter on this story: David Wethe in Houston at firstname.lastname@example.orgTo contact the editors responsible for this story: Simon Casey at email@example.com, Pratish Narayanan, Reg GaleFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
Given that shale drillers will probably generate handsome free cashflows in 2020, it would be ideal to keep an eye on the following Permian explorers that are poised to gain.
When the duo behind the dance-theatre company Peeping Tom, Gabriela Carrizo and Franck Chartier, first presented their new production Child (Kind), last year, their teenage daughter Uma had some pointed thoughts. “She was very critical,” Carrizo says with a weary laugh. Since its inception in 2000, Peeping Tom has crafted a surreal brand of physical theatre, at once unsettling and poetic, and returned time and again to the family unit for inspiration.
The Zacks Analyst Blog Highlights: AES, The Southern Company, Lockheed Martin, Callon Petroleum and New Gold
The Zacks Analyst Blog Highlights: Occidental Petroleum, Chevron, BP, Callon Petroleum, and WPX Energy
Many investors, including Paul Tudor Jones or Stan Druckenmiller, have been saying before 2018's Q4 market crash that the stock market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the first […]
With WTI crude, the domestic benchmark, bouncing back above $60 per barrel on multiple tailwinds, the investor hunger for M&A deals in the energy space is likely to remain strong.
Defense stocks tend to rally when geopolitical tensions rise, banking on a possible uptick in defense contracts. Most importantly, such stocks tend to outperform the broader market for the six months following a major conflict.
The Zacks Analyst Blog Highlights: Callon Petroleum, California Resources, WPX Energy and Ring Energy
Rising tensions in the Middle East, following the airstrike that killed Iranian General Qassem Soleimani, can further increase oil prices.
Callon Petroleum (NYSE:CPE) shareholders are no doubt pleased to see that the share price has had a great month...
Compared to 2019 and, indeed, to the whole decade’s plentiful returns in the market, the energy sector hasn’t provided investors with much to shout about. The S&P 500’s 29% addition this year dwarfs the sector’s 8% increase.Apart from lacking the obvious “sexy” factor of the high-flying tech sector, the in-demand semiconductor companies or the innovative biotech industry, energy stocks have lagged behind due to macro trends such as low oil and natural gas prices. Climate change has played its part, too, as more socially conscious investors have shied away from oil and gas stocks.Against this backdrop, TipRanks, a company that tracks and measures the performance of analysts, identified 3 energy stocks with promising growth prospects. All have fared differently in 2019, but the analysts on the Street see major upside potential for all three. According to the platform’s Stock Comparison tool, all currently have a Strong Buy consensus rating. Kosmos Energy Ltd. (KOS)The execs at Kosmos Energy must have missed the memo about 2019 being a letdown for the industry. The upstream oil company has not only beaten the sector but also the broader market. Its share price is up by 36% year-to-date.It hasn’t all been smooth sailing, though. In December, one of Kosmos’ partners, Tullow Oil, suspended its dividend and lost both its CEO and COO following an announcement that it expects production for 2020 to come down from this year’s 87,000 barrels per day (bpd) to between 70,000 and 80,000 bpd. Additionally, 2021-2023 production is expected to be around 70,000 bpd.The news caused Kosmos’ share price to drop by over 14%. Why, then?Tullow’s worst performers are its Ghana assets, and Kosmos is a partner in the Jubilee field off the coast of Ghana. The fact that one of Kosmos’ partners is in disarray could impact the company’s cash flow and other offshore developments.Fortunately, Kosmos has other projects with more reliable offshore partners. As long as these projects keep moving ahead, Kosmos’ long-term fortunes won’t be tied to those of Tullow's.RBC’s Al Stanton notes the negative news has “painted Kosmos into a corner.” The 4-star analyst remains confident though, noting, “operator BP (a Kosmos partner) is pushing ahead with the Tortue gas development, and other projects offshore Mauritania and Senegal are expected to generate industry interest.”Therefore, Stanton maintained an Outperform rating on KOS, but lowered his price target from $8 to $7. Nevertheless, investors stand to pocket a handsome 26% gain should the target be met. (To watch Stanton’s track record, click here)The news hasn’t dampened the Street’s enthusiasm either. 5 Buy ratings from all 5 analysts tracked over the last three months amount to a Strong Buy consensus rating. At $8, the average price target presents upside potential of 45%. (See Kosmos stock analysis on TipRanks) Callon Petroleum Company (CPE)On the other side of the spectrum, we come across Callon Petroleum. The company operates in the Permian Basin and southeastern New Mexico, focusing solely on the drilling and selling of crude oil. Year-to-date, the energy company is down by 28%. This is a bad look for any company, but as any canny investor knows, beaten-down stocks can be the ones to watch.Earlier this week, the company closed the acquisition of Carrizo Oil & Gas. The merger gives Callon 58% ownership of the company and means it now collectively owns approximately 200,000 net acres in the Permian and Eagle Ford shale, and a further 900,000 in the Permian's Delaware Basin. Management expects the new merger to bring in over $300 million of free cash flow between 2020 and 2021.RBC’s Brad Heffern thinks “the post deal trading multiples and FCF yield screen well versus the peer group.” The analyst added, “We like the company's strong asset positions in the Permian and Eagle Ford Basins. Given the recent acquisition of CRZO, we think CPE has successfully transitioned from a Permian pure play growth story, to sustainable corporate return model with asset diversification, centered around sustainable growth and free cash flow generation.”Accordingly, Heffern reiterated an Outperform rating on Callon. The 4-star analyst’s price target is $8, indicating Heffern’s confidence in CPE’s ability to add 71% to its share price over the coming year. (To watch Heffern’s track record, click here)Does the rest of the Street think the beaten-down stock is ready to surge, too? Yes, it does. Callon’s Strong Buy consensus rating is formed of 7 Buys and 1 Hold. Though, not quite as enthusiastic as the RBC analyst’s take, the average price target of $6.56 still presents potential upside of 40%. (See Callon stock analysis on TipRanks) Vistra Energy Corporation (VST)Positioned performance wise somewhere between our previous stocks is Texas based Vistra Energy. While not in the red in 2019, the energy provider is actually lagging slightly behind the sector, adding 3% to its share price year-to-date.The company’s latest earnings report displayed strong third quarter results, among them adjusted EBITDA of $1.064 billion, beating the Street estimate of $1.045 billion, while also raising 2019 guidance to $3.32-$3.42 billion from $3.22-$3.42 billion. Additionally, the company provided 2020 guidance that was 20% higher than 2019’s guidance.Vistra has been busy on the acquisition side, too. Following the completion of its Crius Energy acquisition in July, the company finalized its purchase of Dallas based Ambit Energy for $475 million in November. The deal increases Vistra’s share of the ERCOT (the electric reliability council of Texas) residential market from 25% to approximately 32%.Evercore’s Greg Gordon believes Vistra’s “long-term outlook is compelling.” The 4-star analyst said, “VST has been consistent optimizing revenue outcomes through load shaping, portfolio optimization and hedging… VST could still be a positive earnings revision story as our forecast is conservative on a few fronts, especially if ERCOT remains tight as backward dated prices should improve. Given their capital discipline (returning capital to shareholders, strengthening the balance sheet), If they deliver stable cash flow through economic/commodity cycles, VST should command a higher valuation, in either the public or private market.”To this end, Gordon kept an Outperform rating on VST, alongside a price target of $32, implying an upward tick of 36% could be in store. (To watch Gordon’s track record, click here)The Street must be reading off the same hymn sheet as the Evercore analyst; No Holds or Sells, simply 5 unanimous Buy ratings bestow Strong Buy status on the energy provider. The average price target of $32.80, indicates handsome upside of 40%. (See Vistra price targets and analyst ratings on TipRanks)
The all-stock deal originally was valued at $3.2 billion, including debt, when it was announced in July. The companies revised the terms after a vocal opponent said it was voting against the deal.
Callon Petroleum Company (NYSE: CPE) ("Callon") and Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) ("Carrizo") today announced that both companies' common shareholders voted to approve all proposals necessary for the parties' pending all-stock transaction at today's respective special meetings held by each company. The merger is expected to close by end of business today, December 20, 2019. Under the terms of the merger agreement, Carrizo shareholders will receive 1.75 shares of Callon common stock for each share of Carrizo common stock they own.
After a delayed vote, both Callon Petroleum Company and Carrizo Oil & Gas, Inc. shareholders voted to approve the companies' all-stock merger Friday morning.