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The Zacks Analyst Blog Highlights: Diamondback Energy, Marathon Oil, Continental Resources and ConocoPhillips
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For Immediate Release
Chicago, IL – July 9, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Diamondback Energy, Inc. (FANG - Free Report) , Marathon Oil Corporation (MRO - Free Report) , Continental Resources, Inc. and ConocoPhillips (COP - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Bet on 4 Oil Stocks Poised to Beat Earnings Estimates in Q2
Analysts expect oil energy companies to swing back to profits for the June quarter from the prior-year comparable period. Thus, a big part of the earnings growth story is easy year-over-year comparisons to the second quarter of 2020 that signified the bottom of the coronavirus pandemic earnings impact.
The event that primarily signaled the earnings growth is surging oil prices, which in turn drove drilling activities in the domestic oil resources.
Oil Price Surges in Q2
The price of West Texas Intermediate crude improved more than 20% in the June quarter of this year. In comparison with the year-ago quarter, the commodity price has improved drastically. The scale of the improvement can be represented as a price surge from the pandemic-hit low mark – when oil was in the negative territory – in April 2020, to breaking the psychological barrier of $70 per barrel.
The significant improvement in the commodity pricing scenario was backed by the optimism that fuel demand will recover considerably this year, thanks to the rolling out of coronavirus vaccines at a massive scale.
Rise in US Rig Tally
A favorable crude pricing environment convinced explorers and producers to return to shale plays although drilling activities have slowed down as upstream players are focusing mainly on stockholder returns rather than boosting output.
Per data from Baker Hughes Company, the tally for oil drilling rigs in the United States for the week through Jun 25 was 372, improving from 337 for the week through Apr 1. In comparison to the June quarter of 2020, the market witnessed a steady decline in the count. From the tally of 562 for the week through Apr 3, 2020, the count of oil drilling rigs plummeted to 188 for the week through Jun 26, 2020.
Quarterly Earnings to Turnaround
On the backdrop of increased oil prices and higher drilling activities, energy companies are likely to have generated handsome earnings in the second quarter of this year. Per the latest Zacks Earnings Trends report, the energy sector is likely to have generated earnings of $15 billion in the June-end quarter of this year, turning around from a loss of $9.6 billion in the prior-year quarter.
Thus, it will be ideal for investors to invest in energy companies with an earnings beat potential. This is because a stock generally surges on an earnings beat.
How to Identify Potential Outperformers?
With a wide range of energy firms flooding the investment space, it is by no means an easy task for investors to arrive at stocks that have the potential to deliver better-than-expected earnings. While it is impossible to be sure about such outperformers, our proprietary methodology makes it fairly simple.
Our research shows that for stocks with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks, which have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
4 Stocks in the Spotlight
Headquartered in Midland, TX, Diamondback Energy is primarily engaged in exploration and production (E&P) activities in oil-rich Permian – the most prolific basin in the United States. The company, with an Earnings ESP of +1.29% and a Zacks Rank #1, is scheduled to release earnings on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Marathon Oil Corp. has a strong footprint in unconventional resource plays like Eagle Ford, Bakken, STACK/SCOOP and Permian. The company has a Zacks Rank #2 and an Earnings ESP of +24.71%. Based in Houston, the independent E&P company is scheduled to release earnings on Aug 4.
Continental Resources is among the top 10 leading oil producers in the United States. The stock has a Zacks Rank #1 and an Earnings ESP of +10.61%. Continental, a leader in energy renaissance in the United States, is set to release results on Aug 2.
ConocoPhillips is a leading oil producer, with a strong presence in Lower 48 major acreage areas that comprise prolific shale plays like Permian basin, Bakken and Eagle Ford. The company has a Zacks Rank #1 and an Earnings ESP of +13.36%. Headquartered in Houston, TX, the upstream energy company is scheduled to release earnings on Aug 3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Diamondback Energy, Marathon Oil, Continental Resources and ConocoPhillips
For Immediate Release
Chicago, IL – July 9, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Diamondback Energy, Inc. (FANG - Free Report) , Marathon Oil Corporation (MRO - Free Report) , Continental Resources, Inc. and ConocoPhillips (COP - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Bet on 4 Oil Stocks Poised to Beat Earnings Estimates in Q2
Analysts expect oil energy companies to swing back to profits for the June quarter from the prior-year comparable period. Thus, a big part of the earnings growth story is easy year-over-year comparisons to the second quarter of 2020 that signified the bottom of the coronavirus pandemic earnings impact.
The event that primarily signaled the earnings growth is surging oil prices, which in turn drove drilling activities in the domestic oil resources.
Oil Price Surges in Q2
The price of West Texas Intermediate crude improved more than 20% in the June quarter of this year. In comparison with the year-ago quarter, the commodity price has improved drastically. The scale of the improvement can be represented as a price surge from the pandemic-hit low mark – when oil was in the negative territory – in April 2020, to breaking the psychological barrier of $70 per barrel.
The significant improvement in the commodity pricing scenario was backed by the optimism that fuel demand will recover considerably this year, thanks to the rolling out of coronavirus vaccines at a massive scale.
Rise in US Rig Tally
A favorable crude pricing environment convinced explorers and producers to return to shale plays although drilling activities have slowed down as upstream players are focusing mainly on stockholder returns rather than boosting output.
Per data from Baker Hughes Company, the tally for oil drilling rigs in the United States for the week through Jun 25 was 372, improving from 337 for the week through Apr 1. In comparison to the June quarter of 2020, the market witnessed a steady decline in the count. From the tally of 562 for the week through Apr 3, 2020, the count of oil drilling rigs plummeted to 188 for the week through Jun 26, 2020.
Quarterly Earnings to Turnaround
On the backdrop of increased oil prices and higher drilling activities, energy companies are likely to have generated handsome earnings in the second quarter of this year. Per the latest Zacks Earnings Trends report, the energy sector is likely to have generated earnings of $15 billion in the June-end quarter of this year, turning around from a loss of $9.6 billion in the prior-year quarter.
Thus, it will be ideal for investors to invest in energy companies with an earnings beat potential. This is because a stock generally surges on an earnings beat.
How to Identify Potential Outperformers?
With a wide range of energy firms flooding the investment space, it is by no means an easy task for investors to arrive at stocks that have the potential to deliver better-than-expected earnings. While it is impossible to be sure about such outperformers, our proprietary methodology makes it fairly simple.
Our research shows that for stocks with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks, which have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
4 Stocks in the Spotlight
Headquartered in Midland, TX, Diamondback Energy is primarily engaged in exploration and production (E&P) activities in oil-rich Permian – the most prolific basin in the United States. The company, with an Earnings ESP of +1.29% and a Zacks Rank #1, is scheduled to release earnings on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Marathon Oil Corp. has a strong footprint in unconventional resource plays like Eagle Ford, Bakken, STACK/SCOOP and Permian. The company has a Zacks Rank #2 and an Earnings ESP of +24.71%. Based in Houston, the independent E&P company is scheduled to release earnings on Aug 4.
Continental Resources is among the top 10 leading oil producers in the United States. The stock has a Zacks Rank #1 and an Earnings ESP of +10.61%. Continental, a leader in energy renaissance in the United States, is set to release results on Aug 2.
ConocoPhillips is a leading oil producer, with a strong presence in Lower 48 major acreage areas that comprise prolific shale plays like Permian basin, Bakken and Eagle Ford. The company has a Zacks Rank #1 and an Earnings ESP of +13.36%. Headquartered in Houston, TX, the upstream energy company is scheduled to release earnings on Aug 3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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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/performance for information about the performance numbers displayed in this press release.