Seeking Alpha

FBR lowers Cimarex, EOG, Resolute Energy on valuation

  • Cimarex Energy (XEC -3.9%) is downgraded to Market Perform from Outperform at FBR Capital, which believes capital efficiency gains and geologic de-risking are already priced in.
  • "Though the story of further de-risking and capital efficiency gains... as well as continued low cost exposure to NGL/natural gas prices remain(s) intact, we are moving to the sidelines to reflect reasonable valuation," the firm writes on XEC.
  • FBR also lowers EOG Resources (EOG -3.8%) and Resolute Energy (REN -4.6%) for similar reasons, believing material YTD stock performance has reasonably priced in geological and operational gains achieved this year and to be achieved near term (I, II).
  • FBR adds Noble Energy (NBL -3%) to its top picks, replacing Newfield Exploration (NFX -3.1%); the firm sees NBL's outperformance being underpinned by substantial geological de-risking and capital efficiency gains in the Niobrara and within the rest of its global exploratory portfolio.
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Comments (4)
  • rjj1960
    , contributor
    Comments (1372) | Send Message
     
    Good call here, those stocks are over priced at this time. The under priced names that will adjust up when wall street wakes up include ECA, PWE, CVE, CNQ, DVN. All sit on huge acreage in Canada.
    23 Oct 2013, 03:16 PM Reply Like
  • unclemike7849
    , contributor
    Comments (280) | Send Message
     
    EOG has been upgraded in price target several times in the past 30 days, yet this outfit (FBR) says EOG is priced right?

     

    NFX just reported the sale price of it's Malaysian assets which amounts to a very good deal. This will fuel NFX's capex program going forward, and yet FBR takes them off of their top picks list??

     

    Just another example of how far off analysts are when voicing their opinion. Look at the wide guestimates of various analysts yearly eps values..........they often vary by 30%.
    23 Oct 2013, 04:01 PM Reply Like
  • Simchad
    , contributor
    Comments (93) | Send Message
     
    Why don't they wait until earnings which is right around the corner. Also, inside buying on eog is at these prices.
    23 Oct 2013, 05:00 PM Reply Like
  • User 353732
    , contributor
    Comments (5075) | Send Message
     
    Since both the FBR downgrades and upgrades are down by about the same percentage, it does appear that investors pay much heed to these pronouncements.
    EOG, XEC and NBL are all very well positioned and are on rapid growth trajectories on all valuation metrics. Their volatility is good for traders and their long term wealth creation is attractive for small investors.
    23 Oct 2013, 05:54 PM Reply Like
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