The Commodities sector offers a wide variety of goods, but the prices differ according to the products. Oil is known as black gold due to its high demand and cost. Its stocks are usually quite expensive. However, the demand lowered recently due to the coronavirus pandemic, as people were forced to remain in their homes during lockdowns. As a result, oil shares are trading very low currently. It’s a perfect time to grab one, until the price skyrockets again. But which one to choose?
Analysts recommend Noble Energy, which is based in Texas. The company suffered from the pandemic. It began a new venture last year, which cost a pretty penny. So far, Noble Energy has been unable to recover invested funds.
After opening the Mediterranean gas fields in 2019, and bringing them to full production, company’s Q3 revenue fell by 12% YoY at $1.12 billion, while Q4’s $1.17 billion lowered by 2% YoY.
Noble Energy was forced to cut back its dividends as EPS showed a net loss in 2019. The company lowered it from 12 cents to 2 cents per quarter due to high expenditures and net losses.
Is the stock worth buying?
Noble Energy holds major stakes in the Permian Basin and owns important oil production lands in the Eagle Ford formation. Its portfolio also includes large natural gas locations in Cyprus and Israel.
While the Texas oil fields provide for a majority of the company’s current operations, the Israeli Mediterranean gas fields hold as much as 43% of Noble Energy’s reserves.
Despite current difficulties, analysts are positive that Noble Energy will rebound as soon as the demand returns on the market. And this will definitely happen soon as governments are already lifting restrictions.
Meanwhile, the stock’s shares are trading down by 56% since late February. The price is practically a steal. Analyst, Scott Hanold, set his price target at $13 for Noble, with a 62% upside potential. The bulls, on the other hand, gave the stock an average price target of $12.83, with a 60% upside potential over the year.