Zacks Investment Research Downgrades Encana Corporation (NYSE:ECA) to Sell

Zacks Investment Research downgraded shares of Encana Corporation (NYSE:ECA) (TSE:ECA) from a hold rating to a sell rating in a report issued on Friday, July 21st.

According to Zacks, “Based on the number of near-term challenges, we are lowering our investment thesis for Encana Corp. to Sell from Hold. With natural gas unable to break through the $3 barrier, the company’s earnings and cash flows are bound to suffer, at least in the near-to-medium term. This is expected to limit its ability to deliver positive earnings surprises. Also, the recent equity offering – despite helping ECA to pay down debt and boost drilling – has significantly diluted existing shareholders' equity. Therefore, ahead of its second-quarter results, we see the company as a risky bet that is best avoided at the moment.”

Other analysts have also issued reports about the company. Royal Bank Of Canada reissued a buy rating and set a $14.00 price target on shares of Encana Corporation in a research note on Monday, May 29th. Jefferies Group LLC set a $14.00 price target on Encana Corporation and gave the company a buy rating in a research note on Wednesday, May 17th. BMO Capital Markets set a $13.00 price target on Encana Corporation and gave the company a buy rating in a research note on Tuesday, May 2nd. Canaccord Genuity reissued a buy rating and set a $14.00 price target on shares of Encana Corporation in a research note on Tuesday, April 11th. Finally, UBS AG raised Encana Corporation from a neutral rating to a buy rating and lifted their price target for the company from $12.00 to $14.00 in a research note on Thursday, March 23rd. One research analyst has rated the stock with a sell rating, eight have issued a hold rating, sixteen have given a buy rating and four have given a strong buy rating to the stock. The company currently has a consensus rating of Buy and a consensus target price of $13.32.

Shares of Encana Corporation (NYSE:ECA) opened at 9.78 on Friday. The stock has a 50 day moving average of $9.29 and a 200 day moving average of $10.69. Encana Corporation has a 52 week low of $8.01 and a 52 week high of $13.85. The firm has a market cap of $9.52 billion, a P/E ratio of 11.66 and a beta of 2.04.

Encana Corporation (NYSE:ECA) (TSE:ECA) last released its quarterly earnings data on Friday, July 21st. The oil and gas company reported $0.18 earnings per share for the quarter, beating the consensus estimate of $0.03 by $0.15. The business had revenue of $1.08 billion for the quarter, compared to analyst estimates of $773.19 million. Encana Corporation had a return on equity of 6.25% and a net margin of 19.09%. During the same period last year, the firm posted $0.10 earnings per share. Analysts anticipate that Encana Corporation will post $0.50 earnings per share for the current fiscal year.

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The business also recently disclosed a quarterly dividend, which will be paid on Friday, September 29th. Investors of record on Friday, September 15th will be paid a dividend of $0.015 per share. The ex-dividend date of this dividend is Thursday, September 14th. This represents a $0.06 dividend on an annualized basis and a dividend yield of 0.61%. Encana Corporation’s payout ratio is 6.98%.

Several hedge funds have recently added to or reduced their stakes in ECA. Equity Investment Corp Acquisition Inc raised its stake in Encana Corporation by 10.7% in the first quarter. Equity Investment Corp Acquisition Inc now owns 12,330 shares of the oil and gas company’s stock worth $144,000 after buying an additional 1,195 shares during the last quarter. Atria Investments LLC bought a new stake in Encana Corporation during the second quarter worth about $113,000. Quantitative Systematic Strategies LLC bought a new stake in Encana Corporation during the second quarter worth about $118,000. DekaBank Deutsche Girozentrale raised its stake in Encana Corporation by 85.8% in the second quarter. DekaBank Deutsche Girozentrale now owns 14,072 shares of the oil and gas company’s stock worth $123,000 after buying an additional 6,500 shares during the last quarter. Finally, SG Americas Securities LLC bought a new stake in Encana Corporation during the first quarter worth about $166,000. Institutional investors own 73.10% of the company’s stock.

Encana Corporation Company Profile

Encana Corporation is an energy producer that is focused on developing its multi-basin portfolio of natural gas, oil and natural gas liquids (NGLs) producing plays. The Company’s operations also include the marketing of natural gas, oil and NGLs. All of its reserves and production are located in North America.

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