cut its rating on
to neutral from buy, saying
decision to release 30 million barrels of oil from reserve strengthened the firm's conviction that oil prices are headed for a steep decline.
A research note from the firm said the decision will result in a quick build-up of petroleum inventories, which, "in conjunction with a sharp increase in oil supplies from
in recent months, should be the catalyst for a steep drop in oil prices, in our judgement. We continue to believe that a price for
West Texas Intermediate
crude of $20 per barrel in 2001 is a reasonable expectation."
Bear Stearns said Amerada Hess' stock price is likely to be under pressure during the period in which oil prices are falling. The firm said the stock has not reached its price target of $75 per share, but it has been a good performer and has advanced 37% in the past seven months. "Given the company's sensitivity to changes in oil prices and the stock's recent performance, we believe the stock price could correct by some 15% to 20% from the current level," according to the note.
Still, the firm said that the company's oil and gas production growth -- estimated at 10% in 2000 and 5% in 2001 -- exceeds that of most major oil companies, and Bear Stearns will continue to believe the long-term outlook for Amerada Hess is good.
: 2000 EPS estimates UP to $1.70 from $1.40 at
Donaldson Lufkin & Jenrette
; and 2001 EPS estimates UP to $1.95 from $1.70
: UP to buy from outperform at
Salomon Smith Barney
: UP to buy from accumulate at
ADDED to recommended for purchase list at
: DOWN to neutral from buy at
; and price target DOWN to $13 from $25.
: DOWN to hold from outperform at
: 2001 EPS estimate DOWN to 85 cents a share from $1.80 at
Owens & Minor
: DOWN to hold from buy at
Credit Suisse First Boston
: 2000 earnings outlook DOWN to $2.35 a share from $2.50 at Goldman; and 2001 earnings outlook to $2.85 from $3.20 a share.
: 2000 EPS estimate DOWN to 80 cents a share from 95 cents at Goldman.
: NEW strong buy at
Banc of America Securities
; price target: $65.
: NEW outperformer at Goldman.
: NEW strong buy at
Deutsche Banc Alex. Brown
; price target: $38.
: NEW outperform at Lehman; price target: $85.