NEW YORK (TheStreet) -- Shares of Paragon Offshore (PGN) fell more than 6% and hit a 52-week low of $2.92 on Tuesday after Bank of America/Merrill Lynch downgraded the energy sector to "market weight."
The firm made the move after OPEC decided last week not to cut oil production and to keep its target at 30 million barrels per day, a move that could leave the market oversupplied. The announcement sent oil prices spiraling downward.
Bank of America now expects Brent crude oil prices in the range of $70 to $75 for 2015. The firm also expects WTI crude prices to drop to $50 in the next month.
"With the collapse in crude, the sector now trades at a 20% discount to the S&P 500, where it has historically traded in-line with the market, but further estimate cuts are likely to come, [as] prices are falling faster than earnings are deteriorating," the firm said.