Cabot Oil & Gas Corporation (COG) — Despite the decimation in oil prices, analysts expect this independent oil and gas company to post positive cash flows this year for the first time since 2009.
On Tuesday, Cowen and Company lowered its price target on COG stock to $22 from $31, but raised its opinion of shares to “outperform” from “market perform.” Cowen analysts were quoted on CNBC saying that of the companies they follow, Cabot would benefit most from higher pricing in the Appalachian Basin and weaker Gulf Coast and Midwest pricing.
S&P Capital IQ Equity Research cut its 12-month price objective a few months back, reducing it by $4 to $27. But its analysts also consider COG stock a “buy,” noting it is a strong value.
Technically, COG stock is in a downtrend that began in May near $35. Shares now sit more than 55% below that high. However, higher accumulation than liquidation appears to be occurring, and a double-bottom may be forming at about $15.50.
Resistance is between the line drawn from the May high and the January high and the 50-day moving average at $18.57.
Note the double buy signals in December from my proprietary indicator, the Collins-Bollinger Reversal (CBR), along with a MACD buy signal. Admittedly, COG stock drifted lower after flashing them, but it appears Cabot is being targeted as a good value in the oil/gas group.
Buy COG stock under $15.75 with a trading target of $22 for a potential return of at least 40%. My long-term target is $30, which, if met, would deliver a profit of more than 90%.
