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Is a Beat in the Cards for Matador's (MTDR) Q2 Earnings?

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Matador Resources Company (MTDR - Free Report) is expected to beat second-quarter 2021 earnings estimates when it reports results on Jul 27, after the closing bell.

In the last reported quarter, the leading upstream company reported adjusted earnings of 71 cents per share, beating the Zacks Consensus Estimate of 39 cents on higher realizations of commodity prices.

As far as earnings surprise is concerned, the Dallas, TX-based company is on a firm footing as it beat the Zacks Consensus Estimate in the last four quarters, the average being 133.3%. This is depicted in the graph below:

Let’s see how things have shaped up prior to the upcoming earnings announcement.

Matador Resources Company Price and EPS Surprise

Matador Resources Company Price and EPS Surprise

Matador Resources Company price-eps-surprise | Matador Resources Company Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings of 73 cents per share has seen three upward estimate revisions and no downward movement over the past 30 days. The estimated figure suggests a surge of 2,533.3% from the prior-year reported number.

The Zacks Consensus Estimate for revenues of $342.8 million indicates a 132.5% improvement from the prior-year quarter.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Matador this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company has an Earnings ESP of +2.63%. This is because the Most Accurate Estimate for the quarter’s earnings is 75 cents per share while the Zacks Consensus Estimate is 73 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Matador currently sports a Zacks Rank #1.

Factors Driving the Better-Than-Expected Earnings

The exploration and production company’s second-quarter earnings are expected to have been boosted by higher crude and gas production volumes. The Zacks Consensus Estimate for oil production volumes is pegged at 51,200 barrels per day (bpd), indicating a rise from the year-ago level of 43,074 bpd. Similarly, the consensus estimate for natural gas production is pegged at 224 million of cubic feet per day (MMcf/d), signaling an increase from 181 MMcf/d a year ago.

Higher production volumes are likely to have been supported by a favorable commodity pricing scenario. 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. Like oil, natural gas price too improved drastically in the June quarter, year over year.

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.

Other Stocks That Warrant a Look

Here are some other firms in the energy space that you may want to consider as these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Enterprise Products Partners LP (EPD - Free Report) has an Earnings ESP of +4.49% and a Zacks Rank of 3. It is scheduled to report second-quarter results on Jul 28. You can see the complete list of today’s Zacks #1 Rank stocks here.

EQT Corporation (EQT - Free Report) has an Earnings ESP of +28.20% and is a Zacks #3 Ranked player. The company is slated to report second-quarter results on Jul 28.

Range Resources Corporation (RRC - Free Report) has an Earnings ESP of +3.51% and is Zacks #1 Ranked. The firm is scheduled to release earnings on Jul 26.