Analyst Update: Encana, Devon Energy, Nabors

Analysts adjusted their ratings and price targets on Encana Corporation (USA) (ECA), Devon Energy Corp (DVN), and Nabors Industries Ltd. (NBR)

Feb 19, 2016 at 3:16 PM
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Amid sinking oil prices, analysts are weighing in on oil stocks Encana Corporation (USA) (NYSE:ECA)Devon Energy Corp (NYSE:DVN), and Nabors Industries Ltd. (NYSE:NBR). Here's a quick roundup of today's brokerage notes on ECA, DVN, and NBR.

  • ECA is reeling today, off 9.2% at $3.20, -- and not far from its all-time low of $3.01, seen in late January -- after Moody's downgraded the stock's senior unsecured notes to junk status. Encana Corporation (USA) is down 37.2% so far in 2016, taking hits as the price of crude oil slumps. But option traders may be looking for some upside after the company's fourth-quarter earnings report, due next Wednesday. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ECA has a 10-day call/put volume ratio of 109.98 -- meaning traders have bought to open nearly 110 ECA calls for each put over the last two weeks. Moreover, this ratio is higher than 98% of all readings taken in the past year.
  • A downgrade to "peer perform" from Wolfe Research, along with a price-target cut to $26 from $27 at Barclays, has DVN 5.1% lower at $18.70 -- and just off a 13-year low of $18.07. Devon Energy Corp is down 14.1% on the week, after reporting quarterly earnings and announcing a poorly received share offering. The stock has shed 41.6% year-to-date, and option traders are likely cheering its slide. DVN has a 50-day put/call volume ratio of 1.89 -- in the 98th percentile of its annual range -- at the ISE, CBOE, and PHLX. But there's plenty of room on the bearish bandwagon, with 13 out of 17 analysts calling the security a "buy" or better.
  • NBR was hit with price-target cuts from KLR Group, Susquehanna, Credit Suisse, Deutsche Bank, and Scotia Howard Weil -- all of whom put their new targets in the $10 to $11 range. Nabors Industries Ltd. reported a smaller-than-expected fourth-quarter loss on Tuesday, but warned that oil prices will likely deteriorate into the second quarter. Today, NBR is down 3.5% at $6.74, continuing the downtrend it began last May, with the stock facing pressure from its 10-week moving average. Still, there is optimism among the options crowd. On the ISE, CBOE, and PHLX, the stock has a 50-day call/put volume ratio of 4.87 -- higher than 96% of the past year's readings.
For other stocks in analysts' crosshairs, read Analyst Upgrades: Alphabet Inc, Applied Materials, Inc., and Barrick Gold Corporation and Analyst Downgrades: Chimerix Inc, TrueCar Inc, and Best Buy Co Inc.

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