We retain our Neutral recommendation on
Noble Energy Inc.
). The oil and gas exploration as well as production operator
currently carries a Zacks Rank #3 (Hold).
Why the Reiteration?
Noble Energy maintained its good run and posted favorable
earnings results in the first quarter of 2013, widely surpassing
our expectation. Production ramp-up in the U.S. onshore assets
primarily led to the uptrend.
The Neutral reiteration takes into account the threat of
operational disturbances from violent storms. The company has to
be extra cautious given the recent prediction by National Oceanic
Atmospheric Administration regarding increased hurricane activity
Noble Energy's Tamar field in offshore Israel and its Alen
prospect in Equatorial Guinea will nevertheless be the key growth
drivers. The company will substantially benefit from rising
natural gas demand in Israel. Further, the company's increased
stake in the high-quality Gunflint block in the Gulf of Mexico
will complement returns.
However, dependence on third party for marketability of
production might act as a headwind. Moreover, commodity price
volatility will continue to affect Noble Energy's business.
All said, growth prospects from the domestic assets look
encouraging thanks to the increased production activities in the
Marcellus and Denver/Julesburg Basins which will benefit Noble
Other Stocks to Consider
However, other oil and gas industry players looking good at
the moment are Zacks Ranked #2 (Buy)
Anadarko Petroleum Corp.
EOG Resources Inc.
ANADARKO PETROL (APC): Free Stock Analysis
ENCANA CORP (ECA): Free Stock Analysis Report
EOG RES INC (EOG): Free Stock Analysis Report
NOBLE ENERGY (NBL): Free Stock Analysis
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