Encana Corp. (ECA) Upgraded to Overweight at Barclays PLC
Encana Corp. (NYSE:ECA) was upgraded by Barclays PLC from an “equal weight” rating to an “overweight” rating in a research report issued to clients and investors on Tuesday. The brokerage currently has a $14.00 price target on the stock, up from their previous price target of $10.00. Barclays PLC’s price objective would indicate a potential upside of 26.24% from the stock’s previous close.
The analysts wrote, “core four” assets in the Permian, Eagle Ford, Montney and Duvernay.”Use of Encana’s 2018 capital spending and production indications lead us to infer a very strong return in 2018 on new spending of circa 30 percent on the corporate level (the 2017 inference is muddled by 2016 M&A),” analyst Thomas Driscoll wrote in a note.This inferred return is 18 percent better than the Barclays’ average return for peers. The analyst expects top-tier delivery from the “core four” basins and raised 2017 and 2018 liquids estimates by 6 percent and 20 percent, respectively.Related Link: Russia Wants To Freeze Oil Output … At Its Historical High LevelEncana’s preliminary 2017 budget of $1.4 billion–$1.8 billion is 7 percent above Barclays’ previous estimate. Encana expects to grow liquids volumes by 15–20 percent per year. Looking ForwardDriscoll forecast total volume growth to outpace expansion in market capital deployed by 12 percent through 2018, compared to 5 percent from peers. Assuming flat $55 crude and $3 gas, Encana expects to grow total production by 60 percent by 2021, as it doubles core four asset volumes and grows liquids by 15–20 percent CAGR. Further, Encana continues to reduce drilling and completion (D&C) costs in its core four assets and continues to reduce lease operating costs.Encana, which has ample liquidity and financial flexibility, expects to grow cash flow by 300 percent over the next five years, assuming flat $55 crude and $3 gas prices. “We are currently modeling through 2018 and are expecting 145 percent cash flow growth if we were to use the same commodity price assumptions,”
Other research analysts have also recently issued reports about the stock. BMO Capital Markets reissued a “buy” rating and set a $10.00 price target on shares of Encana Corp. in a report on Friday, July 22nd. Zacks Investment Research lowered shares of Encana Corp. from a “buy” rating to a “hold” rating in a research report on Wednesday, July 13th. Jefferies Group restated a “buy” rating and set a $12.00 target price on shares of Encana Corp. in a research report on Thursday, June 23rd. Citigroup Inc. upgraded shares of Encana Corp. from a “neutral” rating to a “buy” rating and upped their target price for the stock from $10.00 to $13.00 in a research report on Friday, September 30th. Finally, Credit Suisse Group AG began coverage on shares of Encana Corp. in a research report on Thursday, October 6th. They set an “outperform” rating and a $14.00 target price on the stock. Three investment analysts have rated the stock with a sell rating, nine have given a hold rating and ten have assigned a buy rating to the company. The stock has a consensus rating of “Hold” and a consensus price target of $11.88.
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Shares of Encana Corp. (NYSE:ECA) opened at 11.09 on Tuesday. The stock’s 50 day moving average price is $9.94 and its 200 day moving average price is $8.20. The stock’s market cap is $9.43 billion. Encana Corp. has a one year low of $3.00 and a one year high of $11.31.
Encana Corp. (NYSE:ECA) last posted its quarterly earnings results on Thursday, July 21st. The company reported $0.10 earnings per share (EPS) for the quarter, topping the consensus estimate 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 company earned ($0.20) earnings per share. Analysts forecast that Encana Corp. will post ($0.04) earnings per share for the current year.
The firm also recently announced a quarterly dividend, which was paid on Friday, September 30th. Stockholders of record on Thursday, September 15th were paid a $0.015 dividend. This represents a $0.06 dividend on an annualized basis and a dividend yield of 0.54%. The ex-dividend date was Tuesday, September 13th. Encana Corp.’s dividend payout ratio is presently -1.79%.
Institutional investors have recently modified their holdings of the stock. Swiss National Bank increased its position in shares of Encana Corp. by 5.2% in the second quarter. Swiss National Bank now owns 4,808,100 shares of the company’s stock worth $37,219,000 after buying an additional 238,500 shares in the last quarter. First Manhattan Co. raised its stake in Encana Corp. by 43.5% in the second quarter. First Manhattan Co. now owns 104,320 shares of the company’s stock worth $812,000 after buying an additional 31,602 shares during the last quarter. UBS Asset Management Americas Inc. raised its stake in Encana Corp. by 8.6% in the first quarter. UBS Asset Management Americas Inc. now owns 2,120,040 shares of the company’s stock worth $12,982,000 after buying an additional 168,638 shares during the last quarter. Seven Bridges Advisors LLC purchased a new stake in Encana Corp. during the second quarter worth $346,000. Finally, Credit Agricole S A raised its stake in Encana Corp. by 4.3% in the first quarter. Credit Agricole S A now owns 93,980 shares of the company’s stock worth $573,000 after buying an additional 3,867 shares during the last quarter. 57.44% of the stock is currently owned by institutional investors and hedge funds.
Encana Corp. Company Profile
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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