Zacks Investment Research downgraded shares of Cabot Oil & Gas Corporation (COG) from NEUTRAL to UNDERPERFORM on January 16, 2015, with a target price of $26.00.
Based on the number of near-term challenges, we are lowering our recommendation for Cabot Oil & Gas to Underperform from Neutral. With oil in a freefall, 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. Natural gas' volatile fundamentals and Cabot's high exposure to the commodity are also cause for concern. As it is, Cabot's steep valuation and miniscule payout keep us worried. Considering these factors, we see Cabot as a risky bet from which ordinary investors should refrain.
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