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Permian Producers in Focus as Crude Price Picks Up
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Promising results from three potential coronavirus vaccines have raised hopes of an economic rebound in 2021, leading oil price to the highest mark since Mar 6. With stock prices of crude exploring and producing companies rallying, it is probably time for the energy sector to bounce back from the pandemic lows.
Oil Price Recovers Partially
Although the price of West Texas Intermediate (WTI) crude, approaching $46 per barrel, is significantly below the 2020-beginning price of more than $60 mark, the commodity price has improved considerably in the past few months.
The momentum is likely to continue since the market has witnessed the impact of positive vaccine results. Notably, the vaccine being developed by the University of Oxford and AstraZeneca has shown to be up to 90% effective in preventing people from getting infected with coronavirus. Also, it will be easier to distribute the vaccine since unlike the shots of Moderna, Inc. (MRNA - Free Report) and Pfizer Inc. (PFE - Free Report) , it could be stored at normal refrigerated temperatures.
The positive vaccine data raised hopes that fuel demand will recover considerably once majority of people in the world get vaccinated. Thus, possibilities of energy, now a beaten-down sector, rebounding by next year are high.
Explorers & Producers to Gain
Overall, improving oil prices are definitely a boon for exploration and production companies operating in the prolific shale plays in the United States. It is to be noted that Permian basin is the most prolific play in America and has a huge inventory of low-cost premium wells. Thus, upstream players operating in Permian are likely to benefit significantly with the partial crude price recovery.
Importantly, with most analysts expecting the economy to rebound in 2021, thereby paving ways for further crude price recovery, Permian producers’ outlook seems bright.
Thus, it seems to be an opportune moment for energy investors to keep an eye on Permian producers. Here, we present four stocks carrying a Zacks Rank #3 (Hold) that are well positioned to gain. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Headquartered in Oklahoma City, OK, Devon Energy Corporation (DVN - Free Report) has a strong footprint in the core acres of Delaware Basin, the second-largest component basin in the broader Permian. The stock is likely to see earnings growth of more than 626% in 2021. Notably, the stock has beat the Zacks Consensus Estimate in all the prior four reported quarters, the average positive earnings surprise being 66.7%.
Diamondback Energy Inc. (FANG - Free Report) , headquartered in Midland, TX, is a leading pure play Permian operator. The stock has witnessed upward earnings estimate revisions for 2020 and 2021, respectively, in the past 30 days. In 2021, the upstream firm is likely to see earnings growth of 12.4%.
Concho Resources Inc. , headquartered in Midland, TX, conducts operations across the Delaware and the Midland sub-basins of the broader Permian. In the past seven days, the stock has witnessed upward earnings estimate revisions for 2020 and 2021, respectively.
Headquartered in Dallas, TX, Matador Resources Company (MTDR - Free Report) has strong footprint in liquids-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The stock is likely to see earnings growth of 186.6% in 2021.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Bigstock
Permian Producers in Focus as Crude Price Picks Up
Promising results from three potential coronavirus vaccines have raised hopes of an economic rebound in 2021, leading oil price to the highest mark since Mar 6. With stock prices of crude exploring and producing companies rallying, it is probably time for the energy sector to bounce back from the pandemic lows.
Oil Price Recovers Partially
Although the price of West Texas Intermediate (WTI) crude, approaching $46 per barrel, is significantly below the 2020-beginning price of more than $60 mark, the commodity price has improved considerably in the past few months.
The momentum is likely to continue since the market has witnessed the impact of positive vaccine results. Notably, the vaccine being developed by the University of Oxford and AstraZeneca has shown to be up to 90% effective in preventing people from getting infected with coronavirus. Also, it will be easier to distribute the vaccine since unlike the shots of Moderna, Inc. (MRNA - Free Report) and Pfizer Inc. (PFE - Free Report) , it could be stored at normal refrigerated temperatures.
The positive vaccine data raised hopes that fuel demand will recover considerably once majority of people in the world get vaccinated. Thus, possibilities of energy, now a beaten-down sector, rebounding by next year are high.
Explorers & Producers to Gain
Overall, improving oil prices are definitely a boon for exploration and production companies operating in the prolific shale plays in the United States. It is to be noted that Permian basin is the most prolific play in America and has a huge inventory of low-cost premium wells. Thus, upstream players operating in Permian are likely to benefit significantly with the partial crude price recovery.
Importantly, with most analysts expecting the economy to rebound in 2021, thereby paving ways for further crude price recovery, Permian producers’ outlook seems bright.
Thus, it seems to be an opportune moment for energy investors to keep an eye on Permian producers. Here, we present four stocks carrying a Zacks Rank #3 (Hold) that are well positioned to gain. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Headquartered in Oklahoma City, OK, Devon Energy Corporation (DVN - Free Report) has a strong footprint in the core acres of Delaware Basin, the second-largest component basin in the broader Permian. The stock is likely to see earnings growth of more than 626% in 2021. Notably, the stock has beat the Zacks Consensus Estimate in all the prior four reported quarters, the average positive earnings surprise being 66.7%.
Diamondback Energy Inc. (FANG - Free Report) , headquartered in Midland, TX, is a leading pure play Permian operator. The stock has witnessed upward earnings estimate revisions for 2020 and 2021, respectively, in the past 30 days. In 2021, the upstream firm is likely to see earnings growth of 12.4%.
Concho Resources Inc. , headquartered in Midland, TX, conducts operations across the Delaware and the Midland sub-basins of the broader Permian. In the past seven days, the stock has witnessed upward earnings estimate revisions for 2020 and 2021, respectively.
Headquartered in Dallas, TX, Matador Resources Company (MTDR - Free Report) has strong footprint in liquids-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The stock is likely to see earnings growth of 186.6% in 2021.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>