Business & Finance
Business and Finance
Business and Finance
Fri, July 16, 2010
Thu, July 15, 2010 JPMorgan Chase & Co., BP Plc, Eni SpA, Total SA and Petrobras
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: JPMorgan Chase & Co. (NYSE: [ JPM ]), BP Plc (NYSE: [ BP ]), Eni SpA (NYSE: [ E ]), Total SA (NYSE: [ TOT ]) and Petrobras (NYSE: [ PBR ]).
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Here are highlights from Wednesdaya™s Analyst Blog:
Earnings Preview: JPMorgan
JPMorgan Chase & Co. (NYSE: [ JPM ]) is scheduled to report its second quarter 2010 results before the market opens on Thursday, July 15. The Zacks Consensus Estimate for the second quarter is 71 cents per share, representing a growth of about 155% over the year-ago quarter.
Though concerns related to the impact of the upcoming financial reform bill and JPMorgana™s exposure to BP Plc (NYSE: [ BP ]) have overshadowed its share price in recent days, the company is expected to report in-line results based on its rapidly improving fundamentals.
Earnings Estimate Revisions - Overview
Ahead of the earnings release, estimates have radically moved down. The estimate revision trends and the magnitude of such revisions justify the weakness in the stock. We will now go through the details of the earnings estimate revisions to substantiate investor apathy toward this stock.
Agreement of Analysts
Looking at the estimates revision trends, it becomes clear that a majority of the analysts are in agreement with the lower FY2010 outlook for JPMorgan earnings. The following table shows that 14 analysts have lowered estimates for FY2010, while no upward revisions were witnessed over the last 30 days.
Also, for FY2011, 7 analysts have lowered the estimates and only 2 have moved in the opposite direction. The higher number of downward estimate revisions for FY2010 and FY2011 indicate a likelihood of downward pressure on the performance of the stock in the near term.
Enia™s New Oil Discovery in Angola
Eni SpA (NYSE: [ E ]) announced a major oil discovery in Block 15/06, offshore Angola. Initial evaluations indicate that the discovery holds a significant volume of high quality oil. Located at a distance of 100 kilometers from the coast and at a depth of 470 meters, the reservoir confirms a total of 450 meters of thick gross oil.
Eni has the operatorship in the block with a 35% working interest. Other notable partners are Total SA (NYSE: [ TOT ]) and Petrobras (NYSE: [ PBR ]). The company has a presence in the country since 1980 with a current production of nearly 130,000 barrels of oil equivalent per day.
With new fields continuously coming online across Eni's footprint a" particularly in Italy, Algeria, Norway, Iraq and Angola a" its near-term upstream production prospect is gaining traction with a strong strategic rationale. This discovery will strengthen Enia™s position in Angola, and affirm the countrya™s core position in Eni's organic production growth strategy.
Apart from Angola, Eni is also active in other African countries. In December last year, it purchased interests in two blocks in Uganda from Heritage Oil for nearly $1.4 billion. In addition, Eni is gaining momentum in Iraq as it recently stated that production volumes at Zubair oilfield will reach 250,000 barrels per day (Bpd) from the current rate of 180,000 Bpd.
Enia™s strong presence in North Africa and the Middle East is likely to result in growth. We believe that the company is looking to mitigate mature field decline rates through a combination of production optimization and entry into the new areas. Our Neutral recommendation for Eni remains unchanged with Zacks #3 Rank (Hold).
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