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Bull of the Day: Statoil (STO)

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Commodity prices have been on the move in recent weeks. Part of that move can be attributed to a weakening US dollar but another big chunk of that is chalked up to increased global demand. With the world economy humming along on all cylinders, demand for energy is on the move. Not only has crude oil been on the move, but other energy prices have been increasing as well. The cold start to winter has natural gas on the move and that’s good news for producers like today’s Bull of the Day.

Statoil ASA STO is a Zacks Rank #1 (Strong Buy) in an industry which ranks in the Top 8% of our Zacks Industry Rank. Statoil ASA, an energy company, explores for, produces, transports, refines, and markets petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The company operates through Development and Production Norway; Development and Production International; Marketing, Midstream and Processing; and Other segments. The company also transports, processes, manufactures, markets, and trades oil and gas commodities, such as crude, condensate, gas liquids, products, natural gas, and liquefied natural gas (LNG); markets and trades electricity and emission rights; and operates refineries, gas processing plants, LNG plant, methanol plant, and crude oil terminals. In addition, the company develops offshore wind, and carbon capture and storage projects, as well as offers other renewable energy and low-carbon energy solutions. 

A series of bullish earnings estimate revisions is the reason for the favorable rank. Over the last sixty days, 3 analysts have increased their estimates for the current year, while one has also done so for next year. The moves have had a very bullish effect on the Zacks Consensus Estimates for those periods. The current year consensus number has jumped up from $1.10 to $1.52 while next year’s number has gone from $1.07 all the way to $1.44.

The bullish moves have helped underpin a move in the stock. After ripping to a new 52-week high over $24 the stock sold off to find support after over-shooting the 50-day moving average. A recent spate of buying along the 50-day now has the stock up at $22.79. Another run at the highs could be in the cards as the weather warms and demand for crude heats up.

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