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Range Resources (RRC) Surges 184.3% YTD: What's Driving It?
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Range Resources Corporation (RRC - Free Report) shares have jumped 184.3% year to date (YTD) compared with 113.9% growth of the composite stocks belonging to the industry.
The Zacks Rank #3 (Hold) company, with a market cap of $5 billion, has witnessed a rise in the Zacks Consensus Estimate for 2021 and 2022 earnings per share in the past 60 days.
Image Source: Zacks Investment Research
Let's delve deeper into the factors behind the stock's price appreciation.
What's Favoring the Stock?
The price of natural gas has skyrocketed almost 65% so far this year. Being a leading producer of natural gas and natural gas liquids (NGLs) in the United States, the massive improvement in the commodity price is a boon for Range Resources' upstream operations.
Global growth prospects have improved significantly as vaccination rollout led to increased fuel demand in a few large economies. As most of its production comprises natural gas, Range Resources is well-positioned to capitalize on the mounting clean energy demand.
Range Resources primarily sells its produced natural gas to midstream firms, utilities, marketing companies and industrial users. Also, RRC sells NGLs and crude oil to clients for generating revenues. In the prolific Appalachian Basin, the company has a multi-decade inventory of premium drilling locations, signaling a bright production outlook. Range Resources has lower well costs per lateral foot than many other upstream players.
The company has a strong focus on strengthening its balance sheet. Range Resources expects 2021 to be the fourth consecutive year of absolute debt reduction. The company is focusing on cost improvement and marketing strategies to increase its margins. On a positive note, it has the lowest emission intensity among the upstream companies in the United States.
Risks
Investors with environmental agendas are trying to push capital out of hydrocarbons toward renewables. As such, acquiring capital in the future can become more challenging for companies like Range Resources.
PDC Energy is an independent upstream operator that engages in the exploration, development and production of natural gas, crude oil and natural gas liquids. PDCE, which reached its present form following the January 2020 combination with SRC Energy, is currently the second-largest producer in the Denver-Julesburg Basin. As of 2020-end, PDC Energy's total estimated proved reserves were 731,073 thousand barrels of oil equivalent.
PDC Energy's 2021 earnings are expected to surge 286.2% year over year. PDCE beat the Zacks Consensus Estimate in all of the last four quarters, with an earnings surprise of 51.06%, on average. As of Sep 30, 2021, PDC Energy had $1.7 billion in total liquidity. Its credit facility currently has a total borrowing base of $2.4 billion. Moreover, PDC Energy's debt maturity profile is favorable.
TotalEnergies SE (TTE - Free Report) has one of the best production growth profiles among the oil super majors, characterized by an upstream portfolio, with above industry-average exposure to the faster-growing hydrocarbon producing regions of the world. TTE is making regular investments to expand the renewable operation and strives to achieve net-zero emission by 2050.
TotalEnergies' earnings for 2021 are expected to surge 360.8% year over year. TTE currently has a Zacks Style Score of A for Value and B for Growth. TotalEnergies is managing long-term debt quite efficiently and trying to keep the same at manageable levels. Its debt to capital has been declining over the past few years.
Sunoco LP (SUN - Free Report) is a master limited partnership that engages in distributing motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors. In the United States, Sunoco is among the largest motor fuel distributors in the wholesale market by volume. Through 2020, the partnership sold 7.1 billion gallons of motor fuel.
SUN's earnings for 2021 are expected to surge 743.4% year over year. Sunoco currently has a Zacks Style Score of A for Value and B for Growth. For 2021, Sunoco expects fuel volumes of 7.25-7.75 billion gallons, indicating a rise from the 2020 reported level of 7.09 billion gallons.
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Range Resources (RRC) Surges 184.3% YTD: What's Driving It?
Range Resources Corporation (RRC - Free Report) shares have jumped 184.3% year to date (YTD) compared with 113.9% growth of the composite stocks belonging to the industry.
The Zacks Rank #3 (Hold) company, with a market cap of $5 billion, has witnessed a rise in the Zacks Consensus Estimate for 2021 and 2022 earnings per share in the past 60 days.
Let's delve deeper into the factors behind the stock's price appreciation.
What's Favoring the Stock?
The price of natural gas has skyrocketed almost 65% so far this year. Being a leading producer of natural gas and natural gas liquids (NGLs) in the United States, the massive improvement in the commodity price is a boon for Range Resources' upstream operations.
Global growth prospects have improved significantly as vaccination rollout led to increased fuel demand in a few large economies. As most of its production comprises natural gas, Range Resources is well-positioned to capitalize on the mounting clean energy demand.
Range Resources primarily sells its produced natural gas to midstream firms, utilities, marketing companies and industrial users. Also, RRC sells NGLs and crude oil to clients for generating revenues. In the prolific Appalachian Basin, the company has a multi-decade inventory of premium drilling locations, signaling a bright production outlook. Range Resources has lower well costs per lateral foot than many other upstream players.
The company has a strong focus on strengthening its balance sheet. Range Resources expects 2021 to be the fourth consecutive year of absolute debt reduction. The company is focusing on cost improvement and marketing strategies to increase its margins. On a positive note, it has the lowest emission intensity among the upstream companies in the United States.
Risks
Investors with environmental agendas are trying to push capital out of hydrocarbons toward renewables. As such, acquiring capital in the future can become more challenging for companies like Range Resources.
Key Picks
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
PDC Energy is an independent upstream operator that engages in the exploration, development and production of natural gas, crude oil and natural gas liquids. PDCE, which reached its present form following the January 2020 combination with SRC Energy, is currently the second-largest producer in the Denver-Julesburg Basin. As of 2020-end, PDC Energy's total estimated proved reserves were 731,073 thousand barrels of oil equivalent.
PDC Energy's 2021 earnings are expected to surge 286.2% year over year. PDCE beat the Zacks Consensus Estimate in all of the last four quarters, with an earnings surprise of 51.06%, on average. As of Sep 30, 2021, PDC Energy had $1.7 billion in total liquidity. Its credit facility currently has a total borrowing base of $2.4 billion. Moreover, PDC Energy's debt maturity profile is favorable.
TotalEnergies SE (TTE - Free Report) has one of the best production growth profiles among the oil super majors, characterized by an upstream portfolio, with above industry-average exposure to the faster-growing hydrocarbon producing regions of the world. TTE is making regular investments to expand the renewable operation and strives to achieve net-zero emission by 2050.
TotalEnergies' earnings for 2021 are expected to surge 360.8% year over year. TTE currently has a Zacks Style Score of A for Value and B for Growth. TotalEnergies is managing long-term debt quite efficiently and trying to keep the same at manageable levels. Its debt to capital has been declining over the past few years.
Sunoco LP (SUN - Free Report) is a master limited partnership that engages in distributing motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors. In the United States, Sunoco is among the largest motor fuel distributors in the wholesale market by volume. Through 2020, the partnership sold 7.1 billion gallons of motor fuel.
SUN's earnings for 2021 are expected to surge 743.4% year over year. Sunoco currently has a Zacks Style Score of A for Value and B for Growth. For 2021, Sunoco expects fuel volumes of 7.25-7.75 billion gallons, indicating a rise from the 2020 reported level of 7.09 billion gallons.