Upgrades by Seaport

[dan_s]

Seaport upgrades NBL, ECR, SYRG, CRZO, CXO, WPX; downgrades OAS, PQ
Jun 7 2016, 15:44 ET | By: Carl Surran, SA News Editor

Seaport Global Securities upgrades a half-dozen energy E&P stocks - and downgrades two others - even after the group has rallied YTD, saying it is "willing to overlook higher leverage as long as the operational trajectory is notably improving."

Noble Energy (NBL +4.2%) and Eclipse Resources (ECR +5.5%) are upgraded to Buy from Neutral, as NBL boasts "strong growth and cheap valuation relative to peers" and ERC is "among the cheapest NE gas names while offering good compression in out-year multiples."

Seaport hikes Synergy Resources (SYRG +2.4%) to Buy from Accumulate thanks to "top-tier growth potential at >$50 oil."

Upgraded to Accumulate from Neutral are Carrizo Oil & Gas (CRZO +4.3%), as “strong Eagle Ford returns justify return to growth,” and Concho Resources (CXO +4.6%), with “high-quality exposure to the Delaware Basin poised to garner further credit."

The firm raises WPX Energy (WPX +0.2%) to Neutral from Sell, citing “leverage burden eased with equity, higher commodity price deck assumptions, recent operational progress."

However, Oasis Petroleum (OAS +0.7%) is downgraded to Neutral from Buy as “NAV valuation gap has closed after a 54% move since our March 30 report," and Petroquest Energy (PQ +1.3%) is cut to Accumulate from Buy as “risk/reward upside has tempered" following a 67% move since March 30.

I agree that PQ is a HIGH RISK, but I think natural gas prices will be much higher within six months which should give this micro-cap "gasser" a nice boost. - Dan