In this article, we discuss the 5 commodity stocks that received updated recommendations from analysts. If you want to see some more stocks whose ratings were recently changed by analysts, go directly to Analysts are Revising Ratings for These 10 Commodity Stocks.
5. Celanese Corporation (NYSE:CE)
Number of Hedge Fund Holders: 36
Citi lowered its ratings for Celanese Corporation (NYSE:CE) from “Buy” to “Neutral” on Monday, August 1, 2022. The research firm also cut its price target for the specialty materials company from $143 per share to $118 per share.
Citi analyst P.J. Juvekar pointed toward a slowdown in end markets like construction and housing and how it could impact intermediate firms like Celanese Corporation (NYSE:CE). Juvekar also decreased his estimates for 2023, citing elevated energy prices and a slower recovery in certain markets.
Earlier this year, investment management firm Vltava Fund also mentioned Celanese Corporation (NYSE:CE) in its first-quarter 2022 investor letter. Here’s what the firm said:
“We then used the money freed up to, among other things, open three new positions. The stock price declines during the Russian invasion brought a lot of good prices to the market. Out of all the possibilities we considered, we picked the stocks of Celanese (CE).
Celanese is the world’s largest producer of acetic acid and its chemical derivatives, including vinyl acetate monomers and emulsions. Their applications are used in a wide range of industries, such as automotive tobacco, coatings, construction, energy, telecommunications, food, and medical. Celanese recently closed the acquisition of a large part of DuPont’s business, which will make Celanese an even bigger player in the industry while reducing the cyclicality of it business. The acquisition is quite large and should deliver significant value to shareholders that in our view is not at all presently reflected in the share price. Celanese is a business that stands more or less aside from the main interests of most investors, but it is a company with very high returns on capital, strong free cash flow, and historically very efficient resource allocation.”
4. Corteva, Inc. (NYSE:CTVA)
Number of Hedge Fund Holders: 39
Corteva, Inc. (NYSE:CTVA) received an upgrade from JPMorgan on Monday, August 8, 2022. The research firm increased its ratings for the agricultural chemical company from “Neutral” to “Overweight,” citing multiple tailwinds for the stock.
JPMorgan analyst Jeffrey Zekauskas thinks that Corteva, Inc. (NYSE:CTVA) could raise the prices of its seed products next year given the strength of corn and soy rates.
The upgrade came a few days after Corteva, Inc. (NYSE:CTVA) lifted its sales outlook for 2022. The company now expects to generate revenue in the range of $17.2 – $17.5 billion for the full year, compared to its earlier projection of $16.7 – $17 billion.
Separately, Corteva, Inc. (NYSE:CTVA) also appeared in the first-quarter 2022 investor letter of investment management firm Aristotle Capital Management. The letter stated:
“Corteva Agriscience, one of the world’s largest seed and crop protection companies, was a primary contributor for the quarter. Due to its respected brand and the value-added benefits of its patented seeds and crop protection solutions for farmers, Corteva has been able to more than offset input cost inflation with sustainable price increases. In addition, the company’s ongoing mix shift to higher-margin, premium products, a catalyst we previously identified, is aiding both sales and profit growth. Shares were likely also buoyed by the rise in crop prices. Market participants, perhaps eager to chase short-term trends, poured into the sector. At Aristotle Capital, we look past such gyrations and, as long-term investors, do not attempt to predict short-term changes in commodity prices. We remain excited about what we view to be high-quality characteristics and fundamental improvements that permeate Corteva’s business, not the least of which include its pricing power.”
3. EOG Resources, Inc. (NYSE:EOG)
Number of Hedge Fund Holders: 49
TD Securities upgraded EOG Resources, Inc. (NYSE:EOG) from “Hold” to “Buy” on Friday, August 5, 2022. The upgrade came a day after the Houston-based energy company beat the Q2 profit expectations and declared a special dividend of $1.50 per share.
EOG Resources, Inc. (NYSE:EOG) reported adjusted earnings of $2.74 per share for the three months ended June 30, up from $1.73 per share for the comparable period of 2022. Analysts were looking for earnings of $2.67 per share.
Earlier this year, investment management firm Oakmark Funds also discussed EOG Resources, Inc. (NYSE:EOG) in its first-quarter 2022 investor letter, stating:
“EOG Resources (NYSE:EOG) (+36%), was among our top contributors in the quarter as oil prices rallied due to tight supplies, which were then exacerbated by the Russian invasion of Ukraine. Although their share prices have increased considerably, both companies still look quite undervalued even using longer term oil prices in the $65-70 dollar range. Meanwhile, if times are good over the next couple of years, we expect these companies to return significant percentages of their market caps to shareholders.”
2. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Chevron Corporation (NYSE:CVX) received an upgrade from Societe Generale on Thursday, August 4, 2022. The research firm raised its ratings for the energy giant from “Hold” to “Buy” and lifted its price target for the stock from $175 per share to $190 per share.
Societe Generale analyst Irene Himona referred to Chevron’s Q2 earnings that beat consensus with a big margin. Chevron Corporation (NYSE:CVX) recently delivered solid financial results for the second quarter, driven by higher prices of oil and natural gas during the quarter.
Chevron Corporation (NYSE:CVX) reported adjusted earnings of $5.82 per share on revenue of $68.76 billion. On the other hand, analysts expected Chevron Corporation (NYSE:CVX) to earn $5.10 per share on revenue of $59.29 billion.
1. CF Industries Holdings, Inc. (NYSE:CF)
Number of Hedge Fund Holders: 67
Citi upgraded CF Industries Holdings, Inc. (NYSE:CF) from “Neutral” to “Buy” on Wednesday, August 3, 2022. The research firm also raised its price target for the manufacturer of agricultural fertilizers from $99 per share to $117 per share.
Citi analyst P.J. Juvekar thinks that agriculture stocks, including CF Industries Holdings, Inc. (NYSE:CF), will perform well despite the decelerating economic environment. Juvekar referred to the Russia-Ukraine war that has sharply increased the demand for agricultural inputs around the world.
Separately, investment management firm Carillon Tower Advisers also talked about CF Industries Holdings, Inc. (NYSE:CF) in its first-quarter 2022 investor letter, stating:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. CF Industries (NYSE:CF) manufactures and distributes nitrogen fertilizer. The stock rose as Russia’s invasion of Ukraine accelerated already rising fertilizer prices.”
You can also take a peek at 10 Best Natural Gas Stocks to Buy Now and Jim Cramer Recommends These 10 Stocks For Recession.
