Hold - Price 25.73 on Nov. 5
by Sterne, Agee & Leach

FST reported 3Q08 diluted operating earnings per share of $1.29, versus 82 cents in 3Q07. Our estimate was $1.51 per share; the First Call consensus was $1.38, in a range of $1.16 to $1.70. Our Hold rating and 12-month target of $40 are reiterated. The target equates to 8.8, 2.8 and five times our 2008 estimates of EPS, earnings before interest, taxes, depreciation and amortization, and enterprise value/Ebitda, respectively. The stock now sells at 5.7, 1.8 and four times our '08 EPS, Ebitda and EV/Ebitda estimates, versus 8.9, 2.5 and 3.7 times the group averages, respectively. Total production volumes increased 2.4% year-over-year, 3% sequentially. Realized prices were $9.91 per [thousand cubic feet of natural-gas equivalent], versus $6.52 year-over-year. ...Costs appear well controlled. Market cap: $2 billion.

Outperform - Price 51.44 on Aug. 19
by Raymond James

Forest Oil announced a bolt-on acquisition in Greater Buffalo Wallow [Texas panhandle] and East Texas; it agreed to acquire 350 Bcfe [billion cubic feet of natural-gas equivalent] of proved reserves from private company Cordillera Texas….The transaction is valued at approximately $892 million, equating to an attractive purchase price of $2.55/proved Mcfe [million cubic feet of natural gas equivalent]. The acquisition boosts Forest's net acreage in two of its core areas….Our 95 target is based on a 6.5 times multiple to our '09E Ebitda [earnings before interest, taxes, depreciation and amortization], above the traditional [exploration-and-production] range of 4 times to 6 times, but warranted by our total company net-asset-value estimate of 108 a share. Market cap: $4.96 billion.

Q: Who's working these fields?

A: Different companies. In the Haynesville, there probably are 10 major U.S. companies. In the Utica, there's one U.S. company, Forest Oil [FST], and one major Toronto company, Talisman Energy [TLM.Canada]. In the Montney, there is a whole bunch of companies.

No. 4-ranked Fidelity Leveraged Company is up more than 7% year to date. Manager Soviero, who has guided the fund to a 23% five-year record, relies on Fidelity's deep bench of analysts, and his own strong background in high-yield bonds to sift through opportunities among heavily indebted companies. Big investments in Chesapeake Energy (CHK), Forest Oil (FST) and other energy stocks have paid off, and Soviero remains an oil bull. "The supply side will keep oil high over the next three to five years," he says.

Forest Oil (FST) was upgraded from Hold to Buy at Deutsche Bank. $88 price target. Company has reduced its asset intensity and will continue to benefit from rising energy prices.

Forest Oil (FST) was upgraded at UBS. Rating raised to Buy from Neutral. Price target raised to $72 from $44. 2008 EPS estimates raised to $11.34 from $7.46.

Forest Oil (FST) was upgraded to Buy rating from Hold at Jefferies. Price target jumps to $63 from $50 while 2008 eps estimates dip to $2.60 from $2.66.

the transition to clean, renewable,domestic energy sources begins w/ nat gas.

Forest Drilling

Buy - Price 40.86 on May 30
by CRT Capital Group
Target 45. Forest Oil [recently] announced [sale of] its Alaska assets to Pacific Energy for $464 million of consideration: $448 million in stock and $16 million of PEGX shares. We consider the sale a home run for Forest, having expected a sale price closer to $400 million and having worried about [its] finding a buyer. The sale of Alaskan assets more than covers the nonrecourse debt that was loaded onto the asset base ...we do not foresee tax liability...And this $2.3 billion market-cap producer [will] become gassier, with $1.6 billion acquisition of Houston Exploration.