Encana (ECA) Lowered to Sell at Zacks Investment Research

Encana (NYSE:ECA) (TSE:ECA) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report issued on Tuesday.

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.”

ECA has been the subject of a number of other reports. Scotiabank raised their price target on Encana from $12.00 to $13.00 and gave the company a “sector perform” rating in a research note on Thursday, October 19th. AltaCorp Capital downgraded Encana from an “outperform” rating to a “sector perform” rating and set a $14.50 price target for the company. in a research note on Monday, January 15th. Desjardins upgraded Encana from a “hold” rating to a “buy” rating and set a $16.00 price target for the company in a research note on Friday, January 12th. National Bank Financial raised their price target on Encana from $14.00 to $14.50 and gave the company an “outperform” rating in a research note on Thursday, November 9th. Finally, BMO Capital Markets set a $14.00 price target on Encana and gave the company a “buy” rating in a research note on Thursday, October 19th. Two research analysts have rated the stock with a sell rating, one has issued a hold rating, seventeen have assigned a buy rating and four have assigned a strong buy rating to the company. The stock has a consensus rating of “Buy” and a consensus price target of $15.39.

Encana (NYSE ECA) opened at $11.25 on Tuesday. The company has a debt-to-equity ratio of 0.60, a current ratio of 1.61 and a quick ratio of 1.61. The firm has a market capitalization of $10,344.21, a P/E ratio of 26.58, a price-to-earnings-growth ratio of 1.44 and a beta of 2.07. Encana has a one year low of $8.01 and a one year high of $14.31.

Several hedge funds and other institutional investors have recently modified their holdings of ECA. CIBC Asset Management Inc boosted its stake in shares of Encana by 99.9% during the 3rd quarter. CIBC Asset Management Inc now owns 13,144,660 shares of the oil and gas company’s stock worth $154,346,000 after acquiring an additional 6,568,955 shares during the period. Mackenzie Financial Corp boosted its stake in Encana by 481.4% in the 4th quarter. Mackenzie Financial Corp now owns 6,537,589 shares of the oil and gas company’s stock valued at $87,146,000 after purchasing an additional 5,413,151 shares during the period. Thunderbird Partners LLP bought a new stake in Encana in the 4th quarter valued at $83,294,000. Goldentree Asset Management LP boosted its stake in Encana by 103.9% in the 4th quarter. Goldentree Asset Management LP now owns 5,627,305 shares of the oil and gas company’s stock valued at $75,012,000 after purchasing an additional 2,868,070 shares during the period. Finally, The Manufacturers Life Insurance Company boosted its stake in Encana by 58.4% in the 4th quarter. The Manufacturers Life Insurance Company now owns 6,053,257 shares of the oil and gas company’s stock valued at $80,690,000 after purchasing an additional 2,231,034 shares during the period. Institutional investors own 68.34% of the company’s stock.

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Encana 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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