Statoil Upgraded to Buy - Analyst Blog
02 Aprile 2013 - 9:05PM
Zacks
On Apr 2, Zacks Investment Research upgraded oil and gas company
Statoil ASA (STO) to a Zacks Rank #2 (Buy).
Why the Upgrade?
Statoil has been witnessing rising earnings estimates owing to
better-than-expected fourth-quarter 2012 results on the back of
higher gas sales volumes and margins as well as lower operating
costs. The company declared impressive results on Feb 7, 2013, with
adjusted earnings of 86 cents per ADR that comfortably surpassed
the Zacks Consensus Estimate of 68 cents. The results also improved
from the year-earlier adjusted earnings of 79 cents per ADR.
Norway-based Statoil outperformed the Zacks Consensus Estimate in
three of the last four quarters by an average of 7.84%. The company
also has an impressive long-term expected earnings and sales growth
rate of 3.70% and 4.36%, respectively.
Based on its track record of sustaining volume growth, Statoil
reaffirmed its long-term production guidance. Statoil aims to
achieve an equity production of above 2.5 million barrels of oil
equivalent in 2020. The growth is expected to come from new
projects between 2014 and 2016, resulting in a CAGR of 2% to 3% for
the period 2012 to 2016.
Recently, Statoil claimed 15 leases in the central region of the
U.S. Gulf of Mexico (GoM) in an auction under the U.S. Bureau of
Ocean Energy Management. The addition will fortify its already
significant foothold in the region. Additionally, Statoil also
started production on the Stjerne field in the North Sea. This
marks the company’s fifth fast-track project that came online
following the recent commencement of the Skuld field at Norne.
Based on Statoil’s consistency in earnings, attractive fundamentals
and a positive outlook, the Zacks Consensus Estimate for first
quarter of 2013 went up 5.33% to 79 cents per ADR over the last 60
days.
Other Stocks to Consider
Other stocks worth considering in the energy sector include
EPL Oil & Gas Inc. (EPL), Range
Resources Corp. (RRC) and PBF Energy Inc.
(PBF). All these firms – sporting a Zacks Rank #1 (Strong Buy) –
offer value and are worth accumulating at current levels.
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
PBF ENERGY INC (PBF): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
STATOIL ASA-ADR (STO): Free Stock Analysis Report
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