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Falling Earnings Estimates Signal Weakness Ahead for Anadarko Petroleum (APC)

Zacks Equity Research

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Anadarko Petroleum Corporation APC, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in APC.

A key reason for this move has been the negative trend in earnings estimates revisions. For the full year, we have seen 12 estimates moving down in the past 60 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from $2.90 per share a month ago to its current level of $2.65 a share.

Also, for the current quarter, Anadarko Petroleum has seen 10 downward estimates revisions versus one revision in the opposite direction, dragging the consensus estimate to 75 cents a share from $1.01 over the past 60 days.

The stock has also seen some pretty dismal trading lately, as the share price has dropped 10.3% in the past month.

Anadarko Petroleum Corporation Price and Consensus

Anadarko Petroleum Corporation Price and Consensus | Anadarko Petroleum Corporation Quote

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Oil and Gas - Exploration and Production - United States industry, you may instead consider a better-ranked stock – Bonanza Creek Energy, Inc. BCEI. The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Bonanza Creek Energy, Inc. (BCEI) : Free Stock Analysis Report
 
Anadarko Petroleum Corporation (APC) : Free Stock Analysis Report
 
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Zacks Investment Research