Wells Fargo Cuts Forest Oil (FST) to Market Perform as Eagle Ford Disappoints

February 26, 2014 8:46 AM EST
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Price: $0.34 --0%

Rating Summary:
    5 Buy, 15 Hold, 3 Sell

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Today's Overall Ratings:
    Up: 22 | Down: 17 | New: 13
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Wells Fargo downgraded Forest Oil (NYSE: FST) from Outperform to Market Perform with a price target of $3-$5 (from $4-$6). The change follows disappointed news at Eagle Ford.

"The big focus is the company's decision to defer 2014 Eagle Ford (EF) activity as the company reprocesses existing 3D seismic surveys. Combined with weaker well results, not what we, nor the Street, wanted to see," said analyst David Tameron.

"While we had only previously assumed roughly half the Eagle Ford acreage was prospective, this calls into question even that. While this area could eventually be proven economic, we believe the risk/reward has further deteriorated and now view current share price levels as more neutral. Thus, we are downgrading FST to Market Perform from Outperform with a $3-5 per share valuation range (from $4-6) based on our NAV estimate of $4.28. We are also revising our 2014E EPS to $0.13 from $0.38 and introducing our 2015E EPS of $0.24," he added.

For an analyst ratings summary and ratings history on Forest Oil click here. For more ratings news on Forest Oil click here.

Shares of Forest Oil closed at $3.23 yesterday.

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