Analysts Issue Opposite Views on Encana Corporation (ECA)

Analysts at CIBC upped their rating on shares of Encana Corporation (NYSE:ECA) from Sector Underperform to Neutral in their opinion released on January 31.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Encana Corporation (NYSE:ECA)’s prospects. The earliest insider trade took place on 12/20/2018. Suttles Douglas James gathered a total of 5 thousand shares of company at average share price of $5.55. The total for the purchase was set at $27.75 thousand. After this transaction, the President and CEO account balance stood at 159.21 thousand shares. The stock grew 22.52 percent since that insider purchase. On 12/19/2018, Nimocks Suzanne P, Director, purchased 2.5 thousand shares at a price per share of $5.91. This added 14.78 thousand shares to the insider’s fortune and the stock saw a 15.06 percent rally in value since the news became public. This transaction left 15.6 thousand shares in the Director account. On 12/18/2018, Director Fowler Fred J performed a purchase transaction worth $56.4 thousand. This purchase at $5.64 each has added 10 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded 20.57 percent increase since the transaction was reported. The insider now is left with 25 thousand shares remaining in the account. Mayson Howard John, who performs the Director job, bought 3.5 thousand shares for $20.72 thousand. The acquisition occurred on 12/14/2018 was priced at $5.92 per share. The share price soared 14.86 percent since the reporting date. Mayson Howard John now left with a stake of 45.1 thousand ECA stock worth $306.71 thousand after the insider buying.

Encana Corporation (ECA) is expected to jump by 77.94 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $13 price as 12-month high target. This represents a whopping 91.18 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $10, which represents a return potential of 47.06 percent when compared to the closing price of the stock of $6.8 on Tuesday, February 05. The lowest price target for the stock is $6 — slightly more than -11.76 percent from ECA’s current share price.

The shares are currently floating around the first support level of $6.71. Below this, the next support is placed in the zone of $6.62. Till the time, the ECA stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 51.24 on daily chart, which may remain a cause for concern. If the price breaks below $6.62 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $6.96 mark may result into a pull-back move towards $7.13 level.

ECA shares dropped -0.21 points or -3 percent on Tuesday to $6.8 with a light trade volume of 23 million shares. After opening the session at $7, the shares went as high as $7.035 and as low as $6.78, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $6.49 billion and now has 955.1 million shares outstanding. Encana Corporation (ECA) stock has gained 9.15 percent of market value in 21 trading days.

ECA stock has a trailing 3-year beta of 2.15, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.14 a share in the trailing twelve months. The stock’s value has surged 17.65 percent year to date (YTD) against a decline of -41.13 percent in 12 month’s time. The company’s shares still trade -52.38 percent away from its 1-year high of $14.28 and 36 percent up from 52-week low of $5.00. The average consensus rating on the company is 2.2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Encana Corporation (ECA) are trading at a P/E ratio of 49.18 times earnings reported for the past 12 months. The industry ECA operates in has an average P/E of 16.71. Its P/E ratio went as low as 3.03X and as high as 56.42 over the 5-year span. Further, it is sporting a 1.36 on the Price-to-Sales ratio. Compare this with the industry average P/S of 99.8. 65 percent is the gross profit margin for Encana Corporation and operating margin sits at 12.5 percent. Along with this, the net profit margin is -4 percent.

ECA will be showing off its Q4 earnings on February 14. Analysts are forecasting revenue to climb 19.7 percent to $1.45B in the next fiscal quarter, while earnings are seen soaring by nearly 33.33 percent to $0.16 per share. History has shown that shares in Encana Corporation have gone down on 10 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.17 per share, better than the $0.13, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.26B, worse than the $1.34B analysts expected. Earnings are estimated to increase by 210.9 percent this year, 33.53 percent next year and continue to increase by 44.45 percent annually for the next 5 years.