Zacks said the rising tide in the U.S. exploration and production space should lift WPX stock, but added that it could float on its own, noting analysts are growing more bullish on the company. In the past month, the consensus Q1 EPS estimate has been revised to a loss of 29 cents from a previous 37-cent loss. And the consensus estimate for the full year has narrowed by a penny to 87 cents during that time.
While Zacks rates WPX stock a “Hold,” S&P Capital IQ Equity Research rates shares a “Buy” and recently raised its 12-month target by $1.50 to $7.50. Its analysts cite WPX Energy’s strong hedge portfolio and favorable debt maturity schedule as positives. They also said the $2.35 billion acquisition of RKI in the Permian basin is a “pivotal transaction” that should speed up the company’s transition to liquids from natural gas.
Turning to the chart, WPX stock topped above $26 in September 2014 and then plummeted more than 90% to a low of $2.53 on Jan. 20. But shares appear to have formed a bottom with a breakout through the 50-day moving average in early March.
The breakout was accompanied by very high volume, advancing from a descending right triangle — a powerful technical development. And on Monday, WPX stock closed above its 200-day moving average at $7.10.
Try to buy WPX stock at $7 with a trading objective of $8.50 for a return of over 20%. While this low-priced oil and gas producer is certainly a high-risk investment, what stock in the oil patch isn’t these days? So shares may also be purchased as a long-term hold for a possible retracement to the mid-teens.