Shares of Approach Resources Inc. and Goodrich Petroleum Corp. slumped in early trade Monday, after KeyBanc Capital Markets downgraded both to hold from buy. In a note to clients, the brokerage cut its outlook for crude oil prices for 2015 to $75 a barrel from $90, and lowered its 2016 outlook to $80 a barrel from $90, after OPEC last week failed to cut its supply quota. Analysts said many companies can endure weak oil prices beyond 2015 without impairing balance sheets, but others may need to materially lower capex, "and may exhibit too much uncertainty given balance sheet constraints, reliance on third-party capital events and challenged asset economics for investors to be willing to provide the benefit of the doubt." Approach Resources and Goodrich fit into that category. Approach shares were last down 4.3% and are down 52% in the year so far, while the S&P 500 has gained 12%. Goodrich shares were down 2.7% and have lost 65% of their value in the year so far.
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