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Chesapeake, Cabot Oil, Range Resources Are S&P Gainers

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Cabot Oil & Gas shares rose 2.76% to $36.46. The company is scheduled to report fourth-quarter earnings on Monday. Analysts, on average, expect profit of 15 cents a share on revenue of $265.1 million.

"We expect Cabot to moderate its capital spending plans for 2012 when it reports earnings on February 20," Bank of America Merrill Lynch analysts wrote in a report Tuesday. "The market has anticipated that slower growth will follow, with shares performing poorly YTD. While we anticipate a 15% cut to spending, we think growth may see little or no change driven by improving capital efficiency which will be the dominant near term theme for the story."

Cabot Oil & Gas has a forward P/E of 41.83; the average for exploration and production companies is 19.63. For comparison, both Sunoco (SUN) and Denbury Resources (DNR) have lower forward P/Es of 25.08 and 16.9, respectively.

Analysts were split on Cabot Oil & Gas with 12 analysts each giving it a buy and a hold rating. One analyst rated the stock a sell.

Cabot Oil & Gas gets a B- grade from TheStreet Ratings with a $42.72 price target. The stock closed Thursday at $35.48 and has dropped 3.71% year to date.

Shares of Range Resources increased 1.97% to $64.62. The company is scheduled to report fourth-quarter earnings on Tuesday. Analysts, on average, anticipate earnings of 31 cents a share on revenue of $314.87 million.

"Earlier this week, RRC put a new slide in its presentation showing that its current realizations are $7.17/Mcf in the Marcellus versus $6.34/Mcf in the old presentation," Capital One analysts wrote in a Feb. 9 report. "About half of this uplift is based on RRC's new assumption of higher oil prices ($98 WTI vs $85 before). But, there was another change to the economics that we were not expecting. We spoke with RRC yesterday about the slide and they explained that their old presentation conservatively (accidentally) double counted wet gas processing charges as a deduct from revenues AND as an expense. We were basing our NAV on the incorrect old slides. We are now increasing our SW PA margins by ~35c/Mcfe, which increases our NAV from $63 to $73. This gives the company 18% upside to our NAV, which justifies an Add rating, up from Neutral."

Range Resources has a forward P/E of 57.99; the average for exploration and production companies is 19.63. For comparison, both Continental Resources (CLR) and Southwestern Energy (SWN) have lower forward P/Es of 26.86 and 21.36, respectively.

Of the 39 analysts who cover Range Resources, 21 rated it a hold. Seventeen analysts gave the stock a buy rating and one rated it a sell.

TheStreet Ratings gives Range Resources a C grade and hold rating. The stock closed Thursday at $63.37 and has risen 4.47% year to date.

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-- Written by Alexandra Zendrian

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