MRO : Bullish and Bearish Analyst Opinions

"When you look at an Exxon, when you look at a Chevron, when you look at a Marathon... they're at or even above the average analyst price target... ExxonMobil is actually a couple of percent above where Wall Street as a consensus says it should be." Despite crude oil surging nearly 10% to $100 a barrel, these major exploration and production stocks are barely moving (up less than 1%). This divergence happens because institutional trading desks are anchored to existing sell-side price targets. Until Wall Street analysts officially revise their models upward to account for the new $100/bbl reality, institutional buying in these specific mega-caps will be capped. WATCH these equities until the analyst community issues broad price target upgrades, which will provide the necessary "permission" for institutional desks to resume buying. Analysts could issue rapid upgrades, causing a sudden catch-up rally that you might miss while waiting, or oil prices could mean-revert, justifying the current stagnant stock prices.

1. THE FACT: Trump wants to lower oil prices to $50 a barrel. 2. THE BRIDGE: A presidential push to significantly lower oil prices would negatively impact the revenue and profitability of oil companies. 3. THE VERDICT: Trump's stated goal of $50 oil is a bearish signal for the oil sector.