Some natural-gas stocks received a boost Tuesday as Banc of America initiated coverage of the sector at "Neutral" but highlighted as top picks companies with infrastructure investments, liquefied natural gas assets and master limited partnerships.
"We favor stocks with transparent, low-risk, project-driven growth that can benefit from changing industry dynamics," analyst Elvira Scotto said in a note Monday evening.
Scotto issued "Buy" ratings for Sempra Energy, Spectra Energy Corp., Equitable Resources Inc., Cheniere Energy Inc. and Northwest Natural Gas Co.
Sempra shares rose 25 cents to $59.51 as Spectra rose 50 cents to $24.66; Equitable rose $1.34 to $53.35; and Northwest rose 84 cents to $48.90. However, Cheniere fell 45 cents to $39.25.
Scotto expects Sempra earnings to rise by about 7 to 8 percent through 2011, based on its "fairly predictable" growth catalysts. Spectra has the "right assets in the right locations," Scotto said, with pipelines and storage facilities in high-growth areas across the U.S.
Equitable's drilling program will be a catalyst for its growth as Cheniere, an LNG company, benefits from expansion of the LNG market, Scotto said. Northwest's advantages as a utility are that it has a strong outlook for customer growth and a favorable regulatory environment, she added.
Of "Neutral"-rated companies, Oneok Inc. and Southern Union Co. "face the greatest earnings risk," Scotto said, due to overexposure to volatile commodity prices.
Oneok shares rose 13 cents to $48.82 as Southern Union ended flat at $30.95
No comments:
Post a Comment