A day after Susquehanna downgraded Whiting Petroleum Corp (NYSE:WLL), the oil and gas company was rescued by Stifel analysts. Also, rally in oil prices helped the company to comfortably pursue its journey upwards. Despite the rise in oil prices, Stifel analysts recommended investors that it’s time to invest in high-quality E&P companies that have strong assets and balance sheets.
Stifel is positive
The analysts noted that though the oil prices could head lower, but the shares of strong oil companies will not follow the trend. The research firm explained that the current pattern finds resemblance with the previous pattern where large-cap stocks first lead the oil price and then leads the rig count. Thus, large oil companies may not follow the oil prices, unlike smaller companies that closely follow the commodity prices. Stifel named Whiting Petroleum Corp (NYSE:WLL) among its favorites. At the same time, oil prices witnessed strength after the Federal Reserve changed its tone to indicate that it may start hiking the rates in the short term.
Downgrade from Susquehanna
However, as opposed to Stifel, another research firm, Susquehanna view ‘limited upside’ in the stock of Whiting Petroleum Corp (NYSE:WLL). The firm put the speculations of acquisition of Whiting Petroleum Corp (NYSE:WLL) at rest stating that the event is less likely to happen.
The firm downgraded the shares of the company to ‘Neutral’ from ‘Positive’. Analysts said that except under the scenario of acquisition by a larger E&P company, Whiting has limited room for growth based on the NAV derived price target, which came in at $40. Susquehanna said that the acquisition of the company at a premium price appears to hold less possibility. Due to lack of buyers’ interest, Whiting is required to improve its equity alongside non-core asset divestments.
Amidst contrasting views, Whiting Petroleum Corp (NYSE:WLL) investors preferred to stay with Stifel and helped the stock rally by nearly 9% to $40.95.