In a recent report, Morgan Stanley analysts updated their outlooks for eight oil exploration and production stocks. Here’s what they had to say:
Anadarko Petroleum Corp APC 4.2%
Analysts predict Q4 production will come in at the high end of their guidance range.
Rating: Overweight
Price Target: $91
Apache Corporation APA 5.37%
Analysts believe that Apache will drastically reduce drilling plans from the levels discussed on Analyst Day in November.
Rating: Equal-weight
Price Target: $66
California Resources Corp CRC 0.22%
Analysts predict that the company’s extreme leverage will become an issue in 2015 and that capex will be reduced by 50 percent.
Rating: Underweight
Price Target: $3
ConocoPhillips COP 4.52%
Analysts see falling crude oil prices more than offsetting any benefits of production increases.
Rating: Equal-weight
Price Target: $65
Devon Energy Corp DVN 5.91%
Analysts predict only a 2 percent reduction in capex for the company in 2015 versus an average 29 percent capex cut for the sector.
Rating: Equal-weight
Price Target: $60
EOG Resources Inc EOG 5.27%
Despite the company’s “best in class” asset base, analysts see the company falling short of consensus earnings estimates and drastically reducing its spending moving forward.
Rating: Equal-weight
Price Target: $86
Hess Corp. HES 7.81%
Analysts predict that the company will reduce its 2015 budget by about 40 percent, focusing heavily on cuts to higher-cost Bakken production.
Rating: Equal-weight
Price Target: $66
Marathon Oil Corporation MRO 5.27%
Analysts believe that the company will announce 35 percent year-over-year capex reduction, 16 percent below the midpoint of their previous guidance in December 2014.
Rating: Equal-weight
Price Target: $25
Morgan Stanley analysts are looking to Hess as as a bellwether for the group, as it is the first to announce Q4 earnings on January 28.
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