Swift Energy Corp. shares rose about 2 percent Monday after a Lehman Brothers analyst raised his price target on the oil and gas producer and crude futures surged to a record high.
Light, sweet crude for July delivery jumped to a trading record of $139.89 before retreating to trade up $2.10 at $136.96 a barrel on the New York Mercantile Exchange. A sharply weaker dollar helped fuel the rally.
Before markets opened, Lehman analyst Jeffrey Robertson raised his target price on Swift by a dollar to $62 per share. The analyst also increased his earnings estimates on the Houston company to account for higher energy price expectations.
The investment bank expects benchmark oil prices will now average $113 a barrel this year, up from a previous forecast of $97.50. For 2009, Lehman expects oil prices will average $90 a barrel, up $5 from an earlier forecast.
Those higher expectations led Robertson to predict Swift will post earnings of $8.45 per share this year, up from $7.30 previously forecast.
That is considerably higher than Wall Street's average forecast of $8.17 per share, according to a survey of analysts by Thomson Financial.
"Given the relative strength of oil prices, we continue to favor producers with a higher mix of oil production," Robertson said in a related research note.
Besides Swift, midcap companies in that group include Denbury Resources Inc., Whiting Petroleum Corp., Concho Resources Inc. and Plains Exploration & Production Co., Robertson said. Shares of each rose.
On Friday, Swift completed the sale of most of its New Zealand assets for $82.7 million. The company expects to close the sale of the rest of its assets in the country in the coming months.
Swift shares gained $1.08 to $60.14 in late-morning trading, after earlier rising as high as $60.62.
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