In this article, we will be talking about these 5 oil and gas stocks that analysts are downgrading. If you want to read our comprehensive analysis of the oil and gas sector, you can go directly to Analysts Are Downgrading These 10 Oil and Gas Stocks.
5. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Oklahoma-based energy company Devon Energy Corporation (NYSE:DVN) 30% year to date. The stock is currently in the spotlight after Benchmark Research downgraded the stock to Hold from Buy. Benchmark analyst Subash Chandra cited valuation concerns for the rating action.
Devon Energy Corporation (NYSE:DVN) remains a popular energy stock among the smart money. Out of the 924 hedge funds tracked by Insider Monkey, 51 reported owning stakes in Devon Energy Corporation (NYSE:DVN) at the end of the fourth quarter of 2021. Ken Fisher’s Fisher Asset Management owns a $175.4 million stake in Devon Energy Corporation (NYSE:DVN) as of the end of the fourth quarter.
4. EOG Resources, Inc. (NYSE:EOG)
Number of Hedge Fund Holders: 51
EOG Resources, Inc. (NYSE:EOG) is a US-based energy company. The stock is up 70% over the past six months. The stock was downgraded recently by BofA and Benchmark.
As of the end of the fourth quarter of 2021, 51 hedge funds tracked by Insider Monkey had stakes in EOG Resources, Inc. (NYSE:EOG) as of the end of the fourth quarter, compared to 47 funds a quarter earlier. Natixis Global Asset Management’s Harris Associates has an $873 million stake in EOG Resources, Inc. (NYSE:EOG).
Artisan Partners, a high value-added investment management firm, published its “Artisan Value Fund” fourth quarter 2021 investor letter and mentioned EOG Resources, Inc. (NYSE:EOG). Here‘s what the fund said:
“EOG Resources, a US shale-focused E&P firm, has been a beneficiary of higher energy prices. The business enjoys a low-cost production position and a strong balance sheet which enabled the company to increase production capabilities during the downturn. As energy prices recover and the industry adjusts to the new supply and demand dynamics, investors have begun to appreciate the earnings power of the business. EOG’s management focuses on return on invested capital and cash flow generation, which distinguishes it from most of the company’s competitors. We believe EOG’s high-quality management team and access to low-cost reserves are sustainable competitive advantages in a commodity industry.”
3. Antero Midstream Corporation (NYSE:AM)
Number of Hedge Fund Holders: 16
Antero Midstream Corporation (NYSE:AM) operates midstream energy infrastructure. The company has a vast network of gathering pipelines and compressor stations. The stock is currently trading in the red after Barclays analyst Marc Solecitto downgraded Antero Midstream Corporation (NYSE:AM) to Underweight from Equal Weight with a price target of $10, down from $11.
Solecitto sees “limited visibility” on upside catalysts as he thinks the company operates in “maintenance mode” in 2022. The analyst thinks that accelerated equity returns are not likely until 2024.
2. Marathon Oil Corporation (NYSE:MRO)
Number of Hedge Fund Holders: 40
Texas-based Marathon Oil Corporation (NYSE:MRO) is engaged in hydrocarbon exploration. Benchmark analyst Subash Chandra recently downgraded Marathon Oil Corporation (NYSE:MRO) from Buy to Hold. The analyst also removed his previous price target of $19 on Marathon Oil Corporation (NYSE:MRO). The downgrade came on the back of valuation concerns, and the analyst said he likes energy stocks that are reflecting oil prices of $75 per barrel.
As of the end of the fourth quarter, 40 funds tracked by Insider Monkey had stakes in Marathon Oil Corporation (NYSE:MRO).
1. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 58
Occidental Petroleum Corporation (NYSE:OXY) is currently in the news after it was reported that legendary investor Warren Buffett invested a whopping $4.5 billion into the Texas-based energy companies in just five days. The Wall Street Journal also reported that activist investor Carl Icahn has sold his entire stake in Occidental Petroleum Corporation (NYSE:OXY). As of the end of the fourth quarter, Icahn had a $1.3 billion stake in the company.
BofA analyst Doug Leggate recently downgraded Occidental Petroleum Corporation (NYSE:OXY) to Neutral from Buy with a price target of $80, up from $65.
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