Analyst Update: Encana Corporation (USA), Devon Energy Corp, and Nabors Industries Ltd.

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

by Kirra Fedyszyn

Published on Feb 19, 2016 at 3:16 PM

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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