Oil Stock Boosted By Billion-Dollar Deal

Noble shareholders will own about 3% of the combined company

Deputy Editor
Jul 20, 2020 at 10:12 AM
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The shares of Noble Energy Inc (NASDAQ:NBL) are up 10.9% at $10.71 at last check, after news that Chevron (CVX) will buy the company in a $5 billion stock-swap deal, the largest in the U.S. energy sector since the market crash earlier this year. The deal, which comes amid cheap assets due to low oil prices, will expand Chevron's access to various areas, including Noble's flagship Leviathan field, a natural gas producer, and give Noble Energy shareholders about 3% ownership. 

On the charts, NBL is contending with its descending 120-day moving average, a trendline it hasn't closed above since late-January. Year-to-date, the stock is down around 57%. 

Analysts are optimistic toward Noble stock, with 16 out of 21 at a "buy" or better" rating, and the remaining five sporting a tepid "hold." Further, coming into today, the 12-month consensus price target of $13.69 is a 34% premium to current levels. Also, following the news, Simmons Energy hiked up its price target to $10 from $7.

Albeit amid lighter absolute volume, the stock's 50-day call/put volume ratio of 19.54 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than all other readings in its annual range. In other words, long calls are being picked up at an usually high rate. 

 

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