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ConocoPhillips (COP): A Beat in Store this Earnings Season?
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Upstream energy firm ConocoPhillips (COP - Free Report) will release fourth-quarter 2016 financial results on Feb 2, before the opening bell.
Last quarter, ConocoPhillips posted a positive earnings surprise of 4.35%. However, the company had an average negative earnings surprise of 13.12% in the trailing four quarters. Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that ConocoPhillips is likely to beat on earnings this time because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP for this company is +10.26% as the Most Accurate estimate stands at a loss of 35 cents while the Zacks Consensus Estimate is pegged at a loss of 39 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ConocoPhillips currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a significantly higher chance of beating earnings estimates.
Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of ConocoPhillips’ favorable Zacks Rank and positive Earnings ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
Although oil prices remained low in the first two months of the fourth quarter, the commodity advanced after OPEC decided to cut production. On Nov 30, the cartel reached a historic accord to curb output in keeping with the need to recover from the weak pricing scenario. Notably, this is the first time since 2008 that OPEC signed a deal to cut oil production.
Soon after, non-OPEC players also jumped on the bandwagon to limit crude output. Following the historic deal, crude started moving north and even crossed the psychological $50 per barrel mark. In fact, throughout December the commodity was sold above the benchmark.
Overall, the last month of the fourth quarter was favorable for oil exploration and production (E&P) companies. The improved rig count data issued by Baker Hughes Inc. clearly indicates that more and more of these firms continue to gather to the oil patches.
Amid the improved crude pricing scenario, the company’s raised production guidance looks promising. During third-quarter 2016 results announcement, ConocoPhillips had raised the midpoint of 2016 production guidance to 1,565 thousand barrels of oil equivalent per day.
All those positives are reflected in the company’s price chart for the prior three months. During the aforesaid period, the ConocoPhillips shares gained 9.2% as against almost 8% increase for the Zacks categorized Oil-Energy industry.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Plains All American Pipeline LP (PAA - Free Report) has an Earnings ESP of +26.53% and a Zacks Rank #2.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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ConocoPhillips (COP): A Beat in Store this Earnings Season?
Upstream energy firm ConocoPhillips (COP - Free Report) will release fourth-quarter 2016 financial results on Feb 2, before the opening bell.
Last quarter, ConocoPhillips posted a positive earnings surprise of 4.35%. However, the company had an average negative earnings surprise of 13.12% in the trailing four quarters. Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that ConocoPhillips is likely to beat on earnings this time because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP for this company is +10.26% as the Most Accurate estimate stands at a loss of 35 cents while the Zacks Consensus Estimate is pegged at a loss of 39 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ConocoPhillips currently has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a significantly higher chance of beating earnings estimates.
Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of ConocoPhillips’ favorable Zacks Rank and positive Earnings ESP makes us reasonably confident of an earnings beat.
ConocoPhillips Price and EPS Surprise
ConocoPhillips Price and EPS Surprise | ConocoPhillips Quote
What is Driving the Better-than-Expected Earnings?
Although oil prices remained low in the first two months of the fourth quarter, the commodity advanced after OPEC decided to cut production. On Nov 30, the cartel reached a historic accord to curb output in keeping with the need to recover from the weak pricing scenario. Notably, this is the first time since 2008 that OPEC signed a deal to cut oil production.
Soon after, non-OPEC players also jumped on the bandwagon to limit crude output. Following the historic deal, crude started moving north and even crossed the psychological $50 per barrel mark. In fact, throughout December the commodity was sold above the benchmark.
Overall, the last month of the fourth quarter was favorable for oil exploration and production (E&P) companies. The improved rig count data issued by Baker Hughes Inc. clearly indicates that more and more of these firms continue to gather to the oil patches.
Amid the improved crude pricing scenario, the company’s raised production guidance looks promising. During third-quarter 2016 results announcement, ConocoPhillips had raised the midpoint of 2016 production guidance to 1,565 thousand barrels of oil equivalent per day.
All those positives are reflected in the company’s price chart for the prior three months. During the aforesaid period, the ConocoPhillips shares gained 9.2% as against almost 8% increase for the Zacks categorized Oil-Energy industry.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Enable Midstream Partners LP has an Earnings ESP of +11.77% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Plains All American Pipeline LP (PAA - Free Report) has an Earnings ESP of +26.53% and a Zacks Rank #2.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>