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Strength Seen in Berry Petroleum (BRY): Can Its 5.2% Jump Turn into More Strength?

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Berry Petroleum (BRY - Free Report) shares soared 5.2% in the last trading session to close at $6.86. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6% gain over the past four weeks.

Increased optimism over accelerated recovery of the energy sector following the massive improvement in oil prices primarily drove the stock higher. With focus on low cost and low risk oil-rich resources in the San Joaquin basin of California and the Uinta basin of Utah, Berry is well placed to capitalize on the recovering commodity price.Moreover, the company’s production outlook seems bright since the upstream player has an inventory of 30 years of premium drilling opportunities. Notably, the company’s balance sheet has lower debt exposure as compared to other composite stocks belonging to the market. Thus, Berry is well placed to continue to finance its growth developments with levered free cash flow.

This independent upstream energy company is expected to post quarterly loss of $0.15 per share in its upcoming report, which represents a year-over-year change of -350%. Revenues are expected to be $110.27 million, up 229.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Berry Petroleum, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on BRY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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