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NGLs Week

NGLs Week Newsletter  

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Petchems stocks post mixed results as crude soars: PCW index

HOUSTON, October 7, 2016 (PCW) – Petchems companies’ stocks proved to be a mixed bag this week even as crude soared past the $50/bbl mark, while indexes remained flat.

The midstream sector, which usually moves in tandem with crude, bucked the trend as its average stock price fell 66 cents/share, or 1.98%, to $32.58/share. The bulk of companies in this basket took a tumble, as crude, natural gas and natural gas liquids prices hit year-to-date highs this week. Kinder Morgan was in the lead with its shares down 2.94% during the week as several analysts downgraded the stock on the basis of expectations of slower revenue growth and perceptions of an overvalued stock price, relative to net earnings. Similarly, other companies in the basket saw downgrades as analysts pointed to trailing net margins and higher debt-to-earnings ratios.

On the gainers side, the vinyls group was at the head of the pack with its average stock price up $1.17/share, or 3.01%, to $39.90/share. Olin saw the lion’s share as its stock gained 5.19% during the week as several analysts upgraded it to a ‘Buy.’

The aromatics/refinery sector was next with its average stock price rising $1.65/share, or 2.87%, to $59.29/share. Alon was the leader with its shares up 9.75% amid heavy trading volumes as analysts forecasted the company to beat its historical earnings per share when it reports its 3Q income at the end of the month.

Finally, the olefins/polyolefins group’s average stock price was up $1.68/share, or 2.76%, to $62.66/share. LyondellBasell’s shares gained 4.36% week on week as several analysts upgraded their ratings to a ‘Buy,’ based on expectations of increasing shareholder returns amid capacity expansions and increased downstream investments in the years to come. – Samantha Hartke

*Index components:

Weekly Stock Price Index
  This Week Last Week Difference % Difference
Midstream Average 32.58 33.24 -0.66 -1.98
Olefins/Polyolefins Average 62.66 60.98 1.68 2.76
Aros/Refinery Average 59.29 57.64 1.65 2.87
Vinyls Average 39.90 38.73 1.17 3.01
Major Economic Indicators
  This Week Last Week Difference % Difference
EUR/USD 1.11 1.12 -0.01 -0.77
Dow Jones Indices 18268.50 18167.42 101.08 0.56
S&P 500 2160.70 2151.95 8.75 0.41
WTI crude 50.44 47.83 2.61 5.46