Barclays Maintains an 'Overweight' on Hess Corp. (HES); Weaker 3Q, But the Worst Should be Behind It

Barclays maintains an 'Overweight' on Hess Corp. (NYSE: HES) price target cut $2 to $103.00.

Barclays analyst says, "We remain buyers of HES despite the company's weak 3Q result. Although we are disappointed by the continuing weakness in the refining operations and have subsequently lowered our future earnings outlook, we think the company's core upstream operation remains on track to deliver substantial growth over the next several years. Between 2011 and 2015, we estimate production could rise on average 7% p.a., which should be comparable to other large cap E&P companies (without Libya resumption or any contribution from its recently acquired Utica position). We also think that the company's underlying unit margin will improve over time. Based on our model, we estimate HES' upstream unit profit will improve slightly to $17.1/boe in 2015 from our 2011 estimate of $16.8/boe even though we assume oil price will moderate to $100/b (Brent) from this year's estimate level of $111/b." (Barclays lowers FY11 EPS estimate from $6.40 to $5.90 and FY12 from $6.55 to $6.05)

For more ratings news on Hess Corp. click here and for the rating history of Hess Corp. click here.

Shares of Hess Corp. closed at $60.38 yesterday.

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