Zacks Investment Research Lowers Encana Corp. (ECA) to Hold
Encana Corp. (NYSE:ECA) was downgraded by Zacks Investment Research from a “strong-buy” rating to a “hold” rating in a research report issued on Wednesday.
According to Zacks, “Encana has one of the largest natural gas resource portfolios in North America, providing a diverse and high quality inventory of reserves. We are impressed by the company’s cost reduction initiatives. Additionally, the steps undertaken by Encana to divest high-cost low-profit gas assets will increase its financial flexibility and fund the transition to a more diversified oil and gas firm. The sale of its Gordondale shale properties in Alberta is a case in point, which not only strengthened its balance sheet but also reduced its future spending commitments. However, ECA’s profit is influenced by commodity price fluctuations. With both oil and gas prices still remaining on the lower side, Encana's revenues, earnings and cash flows will be affected. Also, the recent equity offering – despite helping ECA to pay down debt and boost drilling – has significantly diluted existing shareholders' equity.”
A number of other research firms have also recently commented on ECA. RBC Capital Markets reaffirmed a “sector perform” rating and set a $10.00 price target (up from $9.00) on shares of Encana Corp. in a research note on Monday, September 12th. Royal Bank Of Canada dropped their price target on shares of Encana Corp. from $10.00 to $9.00 and set a “sector perform” rating for the company in a research note on Monday, September 12th. Nomura lifted their price target on shares of Encana Corp. from $12.00 to $15.00 and gave the stock a “buy” rating in a research note on Monday, September 12th. KLR Group began coverage on shares of Encana Corp. in a research note on Monday, August 29th. They set a “hold” rating and a $10.00 price target for the company. Finally, Jefferies Group reiterated a “buy” rating and set a $13.00 price objective on shares of Encana Corp. in a report on Tuesday. Five analysts have rated the stock with a sell rating, nine have assigned a hold rating and six have given a buy rating to the stock. Encana Corp. presently has a consensus rating of “Hold” and an average price target of $9.71.
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Encana Corp. (NYSE:ECA) traded up 2.63% during midday trading on Wednesday, hitting $9.35. 49,015,310 shares of the stock were exchanged. The company’s market cap is $7.95 billion. The firm’s 50 day moving average price is $9.52 and its 200 day moving average price is $7.76. Encana Corp. has a 12 month low of $3.00 and a 12 month high of $10.75.
Encana Corp. (NYSE:ECA) last released its quarterly earnings results on Thursday, July 21st. The company reported $0.10 EPS for the quarter, topping analysts’ consensus estimates of ($0.09) by $0.19. Encana Corp. had a negative net margin of 81.73% and a positive return on equity of 0.79%. During the same quarter in the previous year, the firm posted ($0.20) earnings per share. On average, equities research analysts forecast that Encana Corp. will post ($0.10) earnings per share for the current fiscal year.
The business also recently announced a quarterly dividend, which will be paid on Friday, September 30th. Shareholders of record on Thursday, September 15th will be given a dividend of $0.015 per share. This represents a $0.06 annualized dividend and a yield of 0.64%. The ex-dividend date is Tuesday, September 13th. Encana Corp.’s dividend payout ratio is presently -1.79%.
Hedge funds have recently added to or reduced their stakes in the company. Vanguard Group Inc. increased its stake in Encana Corp. by 9.8% in the second quarter. Vanguard Group Inc. now owns 17,708,640 shares of the company’s stock valued at $137,950,000 after buying an additional 1,585,668 shares in the last quarter. BlackRock Group LTD increased its stake in Encana Corp. by 7,634.4% in the first quarter. BlackRock Group LTD now owns 13,148,536 shares of the company’s stock valued at $80,074,000 after buying an additional 12,978,536 shares in the last quarter. Point72 Asset Management L.P. bought a new stake in Encana Corp. during the second quarter valued at $54,865,000. Norges Bank bought a new stake in Encana Corp. during the fourth quarter valued at $33,438,000. Finally, Key Group Holdings Cayman LTD. bought a new stake in Encana Corp. during the second quarter valued at $39,161,000. 64.68% of the stock is currently owned by institutional investors.
About Encana Corp.
Encana Corp is a Canada-based energy producer, which is engaged in the business of exploration, development, production and marketing of natural gas, oil and natural gas liquids (NGLs). The Company’s operations also include the marketing of natural gas, oil and NGLs. All of its reserves and production are located in North America.
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