Encana Corporation (USA) (NYSE:ECA) is surrounded by significant anticipation, as it nears its scheduled conference call regarding the 4Q2015 results. Analysts hold a mean rating of buy on the stock, which is driven by several factors. One of the main reasons for this positive outlook is the rise in oil prices. Added to this, OPEC is in the process of developing a plan to reduce or halt the production of oil for the time being, which means that the global oversupply would soon come to an end.
For its 4Q2015, 7 analysts believe that ECA would report sales of $994 million, while 9 analysts believe that the sales can be as high as $4.52 billion. Added to this, the analysts also believe that the stock would reach a mean price target of $7.87 during the current year, with some analysts placing the price target at $20. In either case, short-term investors would be able to make huge profits, if the price targets become a reality.
The EPS outlook for the current year has yet to be revised by analysts, but for its 4Q2015, analysts believe that ECA can have an EPS of $0.01. Added to this, investors can also look forward to the closing of the DJ Basin assets deal, due to be finalized in 2Q2016.
However, the fate of Encana Corp heavily relies on the global oversupply reaching its end soon. The final decision from OPEC and member countries would play a vital role in this regard. Initially it had been suspected that Iran might pose opposition to the deal, leading to a deadlock in the decision. Fortunately, the Iranian Oil Minister, Bijan Zanganeh, hinted that Iran is ready to favor a deal to increase the price of oil in the international market. If all else goes smoothly, ECA would have a great chance to bounce back.
Encana Corporation (USA) (NYSE:ECA) fell by 9.04% during the February 18 session, to reach a close at $3.52.