Global Hunter Securities Downgrades Ultra Petroleum (UPL) to Neutral; In a Cheap Gas World UPL’s Relative Attractiveness is Impaired
UPL Hot Sheet
Rating Summary:2 Buy, 14 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Global Hunter Securities downgraded Ultra Petroleum (NYSE: UPL) from Accumulate to Neutral, price target lowered from $47 to $36.
Global analyst said, "You know gas is cheap when even Ultra loses money selling it. The company’s industry-leading cost structure combined with management’s relentless focus on return on capital has long translated into growth and returns that have outstripped the rest of the industry. That said, we’ve now moved past the peak in heating degree days in the midst of the mildest winter in 60 years and 2012 is shaping up to be a horrific year for gas prices. That’s bad news for UPL, which is 96% gas and void of any ready-to-drill prospects in a proven oily basin. So, while the stock has been ransacked in tandem with gas prices falling off a cliff, we feel there are better relative opportunities in the E&P space in stocks that have fallen just as much as UPL, but that hold the advantage of recognized liquids-rich inventories to devote capex to in 2012 and not feel like the drilling is being done pro bono."
For an analyst ratings summary and ratings history on Ultra Petroleum click here. For more ratings news on Ultra Petroleum click here.
Shares of Ultra Petroleum closed at $25.42 yesterday, with a 52 week range of $23.32-$50.97.
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Global analyst said, "You know gas is cheap when even Ultra loses money selling it. The company’s industry-leading cost structure combined with management’s relentless focus on return on capital has long translated into growth and returns that have outstripped the rest of the industry. That said, we’ve now moved past the peak in heating degree days in the midst of the mildest winter in 60 years and 2012 is shaping up to be a horrific year for gas prices. That’s bad news for UPL, which is 96% gas and void of any ready-to-drill prospects in a proven oily basin. So, while the stock has been ransacked in tandem with gas prices falling off a cliff, we feel there are better relative opportunities in the E&P space in stocks that have fallen just as much as UPL, but that hold the advantage of recognized liquids-rich inventories to devote capex to in 2012 and not feel like the drilling is being done pro bono."
For an analyst ratings summary and ratings history on Ultra Petroleum click here. For more ratings news on Ultra Petroleum click here.
Shares of Ultra Petroleum closed at $25.42 yesterday, with a 52 week range of $23.32-$50.97.
Discover Wall Street's best ratings calls with the pros - Upgrade to Ratings Insider Elite. Free Trial!
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