Chesapeake, Cabot Oil, Range Resources Are S&P Gainers
The S&P 500 rose 0.07% to 1,359.01 midday Friday.
Shares of Chesapeake Energy rose 3.16% to $24.52. The company was upgraded to buy from hold by Stifel Nicolaus on Friday.
"Firm says if investors look beyond a 12-month horizon, this stock is trading at a cheaper P/NAV than most names and its underlying NAV has been firming up, they think the company should be able to cover its 2012 funding gap, and funding gap begins to shrink in outer years," Briefing.com said of the Stifel Nicolaus report. "Therefore, this becomes an attractive entry point for a company whose stock has gone nowhere since late 2008 and yet has amassed a huge resource exposure with some large acreage positions in some of the best plays."
Chesapeake Energy has an estimated price-to-earnings ratio for next year of 12.12; the average for exploration and production companies is 19.63. For comparison, Valero Energy (VLO) has a lower forward P/E of 6.01 and Noble Energy's (NBL) forward P/E is 12.53.
Eighteen of the 37 analysts who cover Chesapeake rated it a buy. Fifteen analysts rated it at hold and four considered it a sell.
TheStreet Ratings gives Chesapeake a B- grade with a $28.27 price target. The stock closed Thursday at $23.77 and has risen 9.51% year to date.
Cabot Oil & Gas shares rose 2.76% to $36.46. The company is scheduled to report fourth-quarter earnings on Monday. Analysts, on average, expect profit of 15 cents a share on revenue of $265.1 million.
"We expect Cabot to moderate its capital spending plans for 2012 when it reports earnings on February 20," Bank of America Merrill Lynch analysts wrote in a report Tuesday. "The market has anticipated that slower growth will follow, with shares performing poorly YTD. While we anticipate a 15% cut to spending, we think growth may see little or no change driven by improving capital efficiency which will be the dominant near term theme for the story."
Cabot Oil & Gas has a forward P/E of 41.83; the average for exploration and production companies is 19.63. For comparison, both Sunoco(SUN) and Denbury Resources (DNR) have lower forward P/Es of 25.08 and 16.9, respectively.
Analysts were split on Cabot Oil & Gas with 12 analysts each giving it a buy and a hold rating. One analyst rated the stock a sell.
Cabot Oil & Gas gets a B- grade from TheStreet Ratings with a $42.72 price target. The stock closed Thursday at $35.48 and has dropped 3.71% year to date.