4. Credit Suisse
Focus: finding the "go-to" natural gas stock, with a liquids tilt

For natural gas stock investors who expect a recovery in gas prices from near-decade lows but are weary of the murky outlook for Chesapeake Energy ( CHK), Credit Suisse analyst Arun Jayaram suggests that Southwestern Energy ( SWN) is a "go-to" stock when natural gas prices turn because of its strong balance sheet and its existing base of production in the Fayetteville and Marcellus shale's.

Jayaram, who upgraded Southwestern Energy from underperform to neutral on Wednesday concedes that the company is already richly valued compared to some embattled peers; however, he expects shale assets to support 8% production growth through 2015 amid a long-term rebound in gas prices.

"Recent sharp declines in conventional activity and more permanent shifts in producer economics that favor liquids plays could bring about a faster reset in the gas market than implied by the gas futures strip," notes Jayaram, who boosted his price target for Southwestern Energy to $29 from $25.

For those who want to play the energy sector but are weary of direct exposure to commodity prices, Credit Suisse's recent addition of Pennsylvania-based utility PPL Corporation ( PPL) in its "Better than Bonds" portfolio may prove to be a defensive energy play worth watching. The basket was created in 2010 with the premise that bond investors may move into low-beta, high-yield stocks given low returns on Treasuries. Previously, Credit Suisse held Con Ed ( ED) in the portfolio.

5. Deutsche Bank
Focus: natural gas stocks as a defensive trade

As drillers like Southwestern catch the interest of some, Carl Icahn's recent activist investment in Chesapeake Energy has boosted the natural gas sector's biggest 2012 stock story. In Wednesday trading, Chesapeake Energy rose over 5% on Bloomberg reports that the company is considering selling its minority stake in its Chesapeake Midstream Partners ( CHKM) pipeline unit for $4 billion.

Now some are targeting natural gas producers as a way to defend against the possibility negative macroeconomic data continues to hit energy prices.

"We see the recent outperformance of natural gas stocks as a defensive trade within the group (vs. downside risks to oil)," writes Deutsche Bank oil and gas equity analyst Stephen Richardson in a Wednesday note to clients. Still, Richardson concedes its a risky proposition. "While we see tighter balances in 2013 and beyond for the commodity, we expect the stocks to remain volatile due to little support from earnings momentum even in a $4/mmbtu environment in 2013," he adds.

Although natural gas has been hit by an oversupply in the U.S. and a persistent inventory build, Richardson notes that a drop in natural gas drilling rigs may not cut inventories. "A massive step change in upstream operating efficiency has challenged the rigs to production relationship," he writes, citing calculations that although rigs are down 31% production declines have been "slow to materialize."

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