Sell-side analysts are offering a consensus “Buy” rating on shares of CNOOC Limited (NYSE:CEO).  Using the following ratings scale: 1.0 Strong Buy, 2.0 Buy, 3.0 Hold, 4.0 Sell and 5.0 Strong Sell, analysts have an average recommendation of 1.30 on the shares.  Based on a recent trade, the shares are hovering around $165.27 which, according to analysts, yield significant upside potential to the $194.07 consensus target price.

Wall Street firms hire hundreds of analysts who provide recommendations on stocks.  Typically, these analysts look at a company’s fundamentals, building financial models from this information in order to project future trends, specifically future earnings.  These projections are then used as a basis for providing “buy” or “sell” recommendations.  

Beyond issuing buy, sell, or hold recommendations, analysts also create earnings estimates.  These are earnings per share (EPS) numbers that analysts believe a particular company will report on its next statement.  These estimates have been growing in importance on Wall Street over the years, because the companies that “beat” their estimates usually see their stock prices grow while those who don’t usually watch them shrink.

Earnings estimates can also be manipulated, as the analysts are inclined to minimize them so that it increases the chances that a stock will “beat” the artificially lowered estimate in order to get inexperienced investors to buy.

CNOOC Limited (NYSE:CEO)’s shares may have a significant upside to the consensus target of 194.07, but how has it been performing relative to the market?  The stock’s price is 165.27 and their relative strength index (RSI) stands at 67.72.  RSI is a technical oscillator that shows price strength by comparing upward and downward movements.  It indicates oversold and overbought price levels for a stock.  

CNOOC Limited (NYSE:CEO) shares are moving -1.53% trading at $165.27 today.