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TotalEnergies SE and PayPal have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – June 1, 2022 – Zacks Equity Research shares TotalEnergies SE (TTE - Free Report) as the Bull of the Day and PayPal (PYPL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Marathon Oil Corp. (MRO - Free Report) , PDC Energy , and Callon Petroleum Co. .
TotalEnergies SE currently sports the highly-coveted Zacks Rank #1 (Strong Buy) and is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves, and market capitalization. Founded in 1924, TTE has operations in more than 130 countries spanning five continents.
TotalEnergies' operations are divided into four primary segments: Exploration and Production, Integrated Gas, Renewables and Power, and Refining and Chemicals.
The company has benefited from new startups, increases in commodity prices, well-spread LNG assets, and an expanding upstream portfolio that has exposure to rapidly-growing hydrocarbon-producing regions. By 2050, TTE aims to achieve net-zero emissions through regular investments that expand renewable operations.
Share Performance
TTE shares have been a beautiful place for investors to park their hard-earned cash throughout 2022, providing investors with a strong 22% return that easily outpaces the general market's decline.
In fact, shares have been a hot item over the entire past year, penciling in a sizable 30% return and once again easily outpacing the S&P 500's slight decline of -0.5%.
Quarterly Performance
TTE has exceeded the Zacks Consensus EPS Estimate in each of its last four quarters, with an average EPS surprise sitting in the double-digits at 17%. In its latest quarterly release, the company beat earnings estimates by a sizable 22%.
Additionally, the top-line has displayed robust strength. In 2022 Q1, the company reported sales of $64 billion, which displayed a sizable 66% increase in revenue from the year-ago quarter. Furthermore, the company's top-line expanded a massive 54% from $119 billion in FY20 to $210 billion in FY21.
Valuation
The company sports an enticingly low 4.9X forward earnings multiple, nowhere near 2020 highs of 49.1X and well below its median of 11.4X over the last five years. Furthermore, the value represents a deep 73% discount relative to the S&P 500's forward P/E ratio of 18.6X.
TTE boasts a Style Score of an A for value.
Forecasted Growth
Over the last 60 days, analysts have rapidly upped their earnings outlook with a 100% revision agreement across all timeframes – undoubtedly a bullish signal.
The Consensus Estimate Trend for the upcoming quarterly release has soared 65%, reflecting earnings of $3.06 per share – a massive 140% growth in earnings from the year-ago quarter.
Additionally, for FY22, the EPS estimate has climbed 31%, reflecting earnings of $11.81 per share and a sizable 76% expansion in the bottom-line year-over-year.
Bottom Line
One of the best ways investors can find expected winners within the market is by utilizing the Zacks Rank – one of the most potent market tools out there. A portfolio consisting of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 31 years with an average annual return of 25%.
Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
For investors looking to add a solid stock to their portfolios, TotalEnergies SE would be a great bet, displayed by its Zack Rank #1 (Strong Buy).
PayPal currently carries an undesirable Zacks Rank #5 (Strong Sell). PYPL has emerged as one of the largest online payment solutions providers on the back of a strong product portfolio and two-sided platform that enables the company to offer a smooth and secure transaction process to both customers and merchants.
PayPal has been suffering from its weakening momentum in the international market, with COVID-19 uncertainties remaining a thorn in the company's side. Additionally, the intensifying competition in the digital market poses a significant risk to PayPal's current market position.
Furthermore, the company has revised its full-year guidance for both the top and bottom-line.
Share Performance
PayPal shares have suffered year-to-date, losing nearly 55% of their value and easily underperforming the S&P 500's decline of almost 13%.
Stretching out the time frame, we can see that the poor share performance hasn't just been throughout 2022 but also over the last year. PYPL shares have lost 67% of their value in this time horizon and have vastly underperformed the S&P 500's slight return of 0.5%.
Quarterly Performance
Over its last four quarters, the company carries an average EPS surprise of a positive 4.7% and has beaten EPS estimates just twice in this timeframe.
Additionally, in its latest quarter, PayPal reported earnings that were in line with the Zacks Consensus Estimate.
Valuation
PayPal has a forward earnings multiple on the higher side at 31.1X and has a Style Score of D for Value.
Furthermore, the current value represents a rich 67% premium relative to the S&P 500's forward P/E ratio of 18.6X. Although the value has come well off 2021 highs of 87.8X, it still appears pricey.
Forecasted Growth
Over the last 60 days, analysts have been rapidly lowering their earnings outlook across the board with a 100% revision agreement percentage.
The Consensus Estimate Trend has fallen roughly 33% for the upcoming quarter, reflecting earnings of $0.55 per share and a concerning 37% decline in earnings from the year-ago quarter. Additionally, the current year's EPS estimate currently sits at $2.74 per share – forecasting a nasty 27% decline in earnings year-over-year.
Bottom Line
PayPal shares have been the victim of a deep valuation slash not just throughout 2022 but also over the past year as well. Additionally, the bottom-line is expected to shrink by a considerable percentage in FY22.
The high-flying days for this stock are well over for now, and investors should heed caution with this stock as it currently carries an unfavorable Zacks Rank #5 (Strong Sell).
Instead, investors should pivot to stocks carrying a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy).
Additional content:
Tap the Latest Crude Rally with These 3 Promising Upstream Firms
There are a few sectors that thrive when oil prices move upward. The oil and gas exploration and production sector has recovered massively from last year, as big oil producers are recovering financially due to the upward march in oil prices.
Oil Price Hike
The West Texas Intermediate crude price, approaching the $120-per-barrel mark, has risen significantly over the past year. Crude oil continues to surge due to the Russia-Ukraine crisis, which might lead to a bumper year for the upstream energy players.
Declining crude inventories are also backing the crude price rally. Per the data released by U.S. Energy Information Administration, crude oil inventories for the week ending May 20 declined by 1 million barrels to 419.8 million barrels.
With refiners returning to operations amid the resumption of economic and social activities, the oil demand is expected to increase further. There will not be enough supply of the commodity to meet the increased fuel demand, as U.S. explorers and producers are not focusing primely on production growth but on returning more capital to shareholders.
Thus, improving fuel demand amid a tight supply will keep the crude pricing scenario favorable for exploration and production companies operating in the prolific U.S. resources.
3 Stocks in Focus
Since selecting the right companies with promising upstream operations from the stock universe is not an easy task, we employed our proprietary Stock Screener to zero down on three names. All the stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Marathon Oil Corp. boasts almost 10 years of North American unconventional inventory at a breakeven price of less than $40 per barrel. This extends to almost 20 years if the breakeven points are in the $40-$50 range.
For 2022, the company expects total production of 340,000-350,000 barrels of oil equivalent (Boe/d), with oil volumes of 168,000-176,000 barrels per day. The company will be increasing volumes from its high-margin U.S. resource plays — Eagle Ford, Bakken, Oklahoma and Permian.
Marathon Oil lowered its gross debt by $1.4 billion in 2021, which was comfortably covered by the year's free cash flow of $2.2 billion. It is also important to remember that the company's major debt maturities mostly fall after 2025. Thus, there is not much near-term risk on this front.
Owing to the positives, Marathon Oil has gained 90.4% so far this year and is likely to increase further.
Upstream operator PDC Energy is one of the biggest producers in Colorado's DJ Basin, with output from the acreage representing 85% of the total volume. For 2022, the company expects oil production of 78,000-83,000 Boe/d, marking an increase from the prior mentioned 74,000-81,000 Boe per day.
PDC Energy has also hedged a portion of its 2022 oil production at attractive prices. At that price, the company's hedges are expected to add robust positive value in revenues and considerably soften the blow, if there is another meltdown in oil prices.
The exploration and production company, having gained 60.5% so far this year, is likely to gain further.
Callon Petroleum Co. boasts an impressive footprint throughout the core of the Permian Basin. For 2022, the company expects total production of 101-105 thousand barrels of oil equivalent per day (MBoe/d), suggesting an improvement from the 95.6 MBoe/d reported last year. Of the total, 64% will likely be crude oil. The rising oil price is likely to aid CPE's bottom line since the majority of its production comprises crude oil.
The management's decision to shed non-core assets, while focusing on more profitable ones, is a major positive. In 2021, the company received $153 million in proceeds through the divestment of non-core assets in the Eagle Ford and Midland Basins, as well as water infrastructure assets. This is likely to help reduce its debt burden.
Owing to the positives, Callon has gained almost 24% so far this year and is likely to increase further.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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TotalEnergies SE and PayPal have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – June 1, 2022 – Zacks Equity Research shares TotalEnergies SE (TTE - Free Report) as the Bull of the Day and PayPal (PYPL - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Marathon Oil Corp. (MRO - Free Report) , PDC Energy , and Callon Petroleum Co. .
Here is a synopsis of all five stocks:
Bull of the Day:
TotalEnergies SE currently sports the highly-coveted Zacks Rank #1 (Strong Buy) and is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves, and market capitalization. Founded in 1924, TTE has operations in more than 130 countries spanning five continents.
TotalEnergies' operations are divided into four primary segments: Exploration and Production, Integrated Gas, Renewables and Power, and Refining and Chemicals.
The company has benefited from new startups, increases in commodity prices, well-spread LNG assets, and an expanding upstream portfolio that has exposure to rapidly-growing hydrocarbon-producing regions. By 2050, TTE aims to achieve net-zero emissions through regular investments that expand renewable operations.
Share Performance
TTE shares have been a beautiful place for investors to park their hard-earned cash throughout 2022, providing investors with a strong 22% return that easily outpaces the general market's decline.
In fact, shares have been a hot item over the entire past year, penciling in a sizable 30% return and once again easily outpacing the S&P 500's slight decline of -0.5%.
Quarterly Performance
TTE has exceeded the Zacks Consensus EPS Estimate in each of its last four quarters, with an average EPS surprise sitting in the double-digits at 17%. In its latest quarterly release, the company beat earnings estimates by a sizable 22%.
Additionally, the top-line has displayed robust strength. In 2022 Q1, the company reported sales of $64 billion, which displayed a sizable 66% increase in revenue from the year-ago quarter. Furthermore, the company's top-line expanded a massive 54% from $119 billion in FY20 to $210 billion in FY21.
Valuation
The company sports an enticingly low 4.9X forward earnings multiple, nowhere near 2020 highs of 49.1X and well below its median of 11.4X over the last five years. Furthermore, the value represents a deep 73% discount relative to the S&P 500's forward P/E ratio of 18.6X.
TTE boasts a Style Score of an A for value.
Forecasted Growth
Over the last 60 days, analysts have rapidly upped their earnings outlook with a 100% revision agreement across all timeframes – undoubtedly a bullish signal.
The Consensus Estimate Trend for the upcoming quarterly release has soared 65%, reflecting earnings of $3.06 per share – a massive 140% growth in earnings from the year-ago quarter.
Additionally, for FY22, the EPS estimate has climbed 31%, reflecting earnings of $11.81 per share and a sizable 76% expansion in the bottom-line year-over-year.
Bottom Line
One of the best ways investors can find expected winners within the market is by utilizing the Zacks Rank – one of the most potent market tools out there. A portfolio consisting of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 31 years with an average annual return of 25%.
Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
For investors looking to add a solid stock to their portfolios, TotalEnergies SE would be a great bet, displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
PayPal currently carries an undesirable Zacks Rank #5 (Strong Sell). PYPL has emerged as one of the largest online payment solutions providers on the back of a strong product portfolio and two-sided platform that enables the company to offer a smooth and secure transaction process to both customers and merchants.
PayPal has been suffering from its weakening momentum in the international market, with COVID-19 uncertainties remaining a thorn in the company's side. Additionally, the intensifying competition in the digital market poses a significant risk to PayPal's current market position.
Furthermore, the company has revised its full-year guidance for both the top and bottom-line.
Share Performance
PayPal shares have suffered year-to-date, losing nearly 55% of their value and easily underperforming the S&P 500's decline of almost 13%.
Stretching out the time frame, we can see that the poor share performance hasn't just been throughout 2022 but also over the last year. PYPL shares have lost 67% of their value in this time horizon and have vastly underperformed the S&P 500's slight return of 0.5%.
Quarterly Performance
Over its last four quarters, the company carries an average EPS surprise of a positive 4.7% and has beaten EPS estimates just twice in this timeframe.
Additionally, in its latest quarter, PayPal reported earnings that were in line with the Zacks Consensus Estimate.
Valuation
PayPal has a forward earnings multiple on the higher side at 31.1X and has a Style Score of D for Value.
Furthermore, the current value represents a rich 67% premium relative to the S&P 500's forward P/E ratio of 18.6X. Although the value has come well off 2021 highs of 87.8X, it still appears pricey.
Forecasted Growth
Over the last 60 days, analysts have been rapidly lowering their earnings outlook across the board with a 100% revision agreement percentage.
The Consensus Estimate Trend has fallen roughly 33% for the upcoming quarter, reflecting earnings of $0.55 per share and a concerning 37% decline in earnings from the year-ago quarter. Additionally, the current year's EPS estimate currently sits at $2.74 per share – forecasting a nasty 27% decline in earnings year-over-year.
Bottom Line
PayPal shares have been the victim of a deep valuation slash not just throughout 2022 but also over the past year as well. Additionally, the bottom-line is expected to shrink by a considerable percentage in FY22.
The high-flying days for this stock are well over for now, and investors should heed caution with this stock as it currently carries an unfavorable Zacks Rank #5 (Strong Sell).
Instead, investors should pivot to stocks carrying a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy).
Additional content:
Tap the Latest Crude Rally with These 3 Promising Upstream Firms
There are a few sectors that thrive when oil prices move upward. The oil and gas exploration and production sector has recovered massively from last year, as big oil producers are recovering financially due to the upward march in oil prices.
Oil Price Hike
The West Texas Intermediate crude price, approaching the $120-per-barrel mark, has risen significantly over the past year. Crude oil continues to surge due to the Russia-Ukraine crisis, which might lead to a bumper year for the upstream energy players.
Declining crude inventories are also backing the crude price rally. Per the data released by U.S. Energy Information Administration, crude oil inventories for the week ending May 20 declined by 1 million barrels to 419.8 million barrels.
With refiners returning to operations amid the resumption of economic and social activities, the oil demand is expected to increase further. There will not be enough supply of the commodity to meet the increased fuel demand, as U.S. explorers and producers are not focusing primely on production growth but on returning more capital to shareholders.
Thus, improving fuel demand amid a tight supply will keep the crude pricing scenario favorable for exploration and production companies operating in the prolific U.S. resources.
3 Stocks in Focus
Since selecting the right companies with promising upstream operations from the stock universe is not an easy task, we employed our proprietary Stock Screener to zero down on three names. All the stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Marathon Oil Corp. boasts almost 10 years of North American unconventional inventory at a breakeven price of less than $40 per barrel. This extends to almost 20 years if the breakeven points are in the $40-$50 range.
For 2022, the company expects total production of 340,000-350,000 barrels of oil equivalent (Boe/d), with oil volumes of 168,000-176,000 barrels per day. The company will be increasing volumes from its high-margin U.S. resource plays — Eagle Ford, Bakken, Oklahoma and Permian.
Marathon Oil lowered its gross debt by $1.4 billion in 2021, which was comfortably covered by the year's free cash flow of $2.2 billion. It is also important to remember that the company's major debt maturities mostly fall after 2025. Thus, there is not much near-term risk on this front.
Owing to the positives, Marathon Oil has gained 90.4% so far this year and is likely to increase further.
Upstream operator PDC Energy is one of the biggest producers in Colorado's DJ Basin, with output from the acreage representing 85% of the total volume. For 2022, the company expects oil production of 78,000-83,000 Boe/d, marking an increase from the prior mentioned 74,000-81,000 Boe per day.
PDC Energy has also hedged a portion of its 2022 oil production at attractive prices. At that price, the company's hedges are expected to add robust positive value in revenues and considerably soften the blow, if there is another meltdown in oil prices.
The exploration and production company, having gained 60.5% so far this year, is likely to gain further.
Callon Petroleum Co. boasts an impressive footprint throughout the core of the Permian Basin. For 2022, the company expects total production of 101-105 thousand barrels of oil equivalent per day (MBoe/d), suggesting an improvement from the 95.6 MBoe/d reported last year. Of the total, 64% will likely be crude oil. The rising oil price is likely to aid CPE's bottom line since the majority of its production comprises crude oil.
The management's decision to shed non-core assets, while focusing on more profitable ones, is a major positive. In 2021, the company received $153 million in proceeds through the divestment of non-core assets in the Eagle Ford and Midland Basins, as well as water infrastructure assets. This is likely to help reduce its debt burden.
Owing to the positives, Callon has gained almost 24% so far this year and is likely to increase further.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.