2 Energy Stocks Goldman Sachs is Selling

BPL and TRP are trading near their late-December lows

by Karee Venema

Published on Jan 3, 2019 at 10:17 AM

Goldman Sachs chimed in on pipeline stocks today, pegging Kinder Morgan Inc (NYSE:KMI) as its top pick in the sector. However, the brokerage firm downgraded Buckeye Partners, L.P. (NYSE:BPL) and TransCanada Corporation (NYSE:TRP) to "sell" from "neutral," citing valuation concerns for both energy stocks.

Buckeye Partners Stock at Risk of More Bear Notes

Buckeye Partners stock hit an annual high of $57.19 on Jan. 29, and has since surrendered roughly 48% -- last seen trading at $30 -- amid steady resistance from the 80- and 120-day moving averages. Plus, the shares are not far removed from their Dec. 26 10-year low of $25.71.

As such, the majority of analysts are already skeptical of BPL stock, with 80% in coverage maintaining a "hold" or worse rating. However, the average 12-month price target of $35.58 is a nearly 20% premium to current levels, meaning the energy stock is at risk of price-target cuts, should this downside continue.

Bigger Losses Could Be Ahead for TransCanada

TransCanada stock has also been sliding over the past 12 months, down 25.3% year-over-year. While the shares have recovered some from their Dec. 26 two-year low of $34.58, they are running out of steam near $37 -- home to a Dec. 21 bear gap -- down 0.5% today at $36.92.

There's plenty of room for more downgrades to come down the pike, considering seven of 10 analysts currently maintain a "buy" or better rating on TRP stock. Short sellers could continue to create headwinds, too, as they continue to climb on board. Short interest jumped 36.2% in the two most recent reporting periods to 12.29 million shares, a slim 1.4% of the equity's available float.

a schaeffer's exclusive


5 tips to leverage profits in this FREE insider report!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The Trend Minting Millionaires -- But Who Is Really Paying?
Porter Stansberry is making a concerning prediction.
Retail and FOMC Headline Second Week of December
Fed Chair Jerome Powell will speak Wednesday afternoon after the Fed's decision
Discover Financial Stock Gets Slammed by Instinet
DFS still remains 41% higher year-to-date
The Trend Minting Millionaires -- But Who Is Really Paying?
Porter Stansberry is making a concerning prediction.