BRY - Coterra Energy upgraded Northern Oil and Berry Corp. cut at Piper Sandler

2023-08-14 14:42:48 ET

Coterra Energy ( NYSE: CTRA ) was upgraded to Overweight from Neutral with a $35 price target, raised from $30, at Piper Sandler, saying Q2 results and updated long-term guidance demonstrate expectations from continued strong execution across the portfolio.

The company's strategy shift to up-spaced development paired with increased completion intensity is paying off, Piper's Mark Lear wrote, adding the updated long-term guidance which does not bake in ~$200M of potential Marcellus savings being reallocated to the Delaware, paired with a debt-free balance sheet projected by year-end at the strip, will translate to stronger returns to shareholders.

At the same time, Lear downgraded Northern Oil & Gas ( NYSE: NOG ) to Neutral from Overweight with a $46 PT, after the stock has been one of the strongest E&P performers, and Berry Corp. ( NASDAQ: BRY ) to Neutral from Overweight with a $9 PT, saying the company's acquisition strategy and new permit moratorium results in "opaque visibility" for the business.

Lear also maintained his Overweight rating on Devon Energy ( DVN ), saying while the last several quarters have raised concerns on execution, inventory depth and efficiency, the stock has been a big laggard YTD, but those concerns are "largely priced into the stock, and we like the operational set up into H2 2023 with what appears to be a big slug of New Mexico high-grading on the way."

The analyst's favorite E&P names remain the same: Pioneer Natural Resources ( PXD ), Diamondback Energy ( FANG ), Chord Energy ( CHRD ), Permian Resources ( PR ) and EQT ( EQT ).

More on Coterra Energy:

• Financial and valuation comparison to sector peers
• Analysis: Coterra Energy: Crude Oil Breakout Could Soon Fuel A 60%-Plus Rally
• Stock price return: Up 22.5% YTD, up less than 1% in the past 12 months

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