Hess’s stock sinks to lead energy peers lower after analyst downgrades

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Shares of Hess Corp. sank 3.7% in afternoon trading Tuesday, bucking the rallies in crude oil prices and the broader stock market, after Argus Research analyst Bill Selesky downgraded the oil production company, citing concerns over continued losses and rising debt levels. The stock was the biggest decliner in the SPDR Energy Select Sector ETF , which fell 1.1%. Meanwhile, the S&P 500 surged 1.5% and crude oil futures jumped 2.6%. The energy ETF was pulling back after surging 7.2% amid a three-day win streak off last Wednesday’s 8-month closing low. Argus’s Selesky cut his rating to hold from buy. He noted that at the end of the third quarter, the debt to capital ratio and increased to 56.5% from 37.0% a year ago. “We believe that less debt would be preferable in the current challenging energy environment,” Selesky wrote in a note to clients. “Despite its productive asset portfolio, we expect Hess to face continued pressure from low oil prices and are widening our loss estimates for both this year and next.” The stock has tumbled 45.2% year to date, while the energy ETF has shed 50.9% and the S&P 500 has gained 4.0%.
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