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Here's Why it is Worth Investing in RPC (RES) Stock Right Now
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RPC, Inc. (RES - Free Report) has witnessed upward earnings estimate revisions for 2021 in the past 60 days.
The stock of the company, currently carrying a Zacks Rank #2 (Buy), has jumped 49.8% year to date compared with 26.7% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
Factors Favoring the Stock
The West Texas Intermediate crude price, which is currently hovering around $75 per barrel, has significantly improved from its slump into negative territory in April 2020. Global growth prospects have improved significantly as vaccination rollouts led to increased fuel demand in a few large economies.
Increasing oil prices are encouraging explorers and producers to gradually return to shale plays. Thus, higher upstream activities are beneficial for RPC since it provides specialized oilfield services and equipment to almost all prospective oil and gas shale plays in the United States.
RPC expects its customers to respond to the favorable commodity pricing scenario. Hence, the company will plan for increased drilling and completion activities, which will translate into higher demand for its oilfield services and secure incremental cash flows.
For more than a decade, RPC has been reporting positive operating cash flows, reflecting stable operations despite a volatile commodity market. Since the beginning of the third quarter, the company has been witnessing higher customer demand for its pressure pumping services. This indicates that RPC's customer base is responding to higher commodity prices.
RPC initiated a horizontal pressure pumping fleet to meet the rising demand and expects higher activity in this service line for the remaining year. At the third quarter-end, RPC's Tier IV dual-fuel pressure pumping fleet came online in the Permian Basin. This is expected to boost the company's utilization rate and profits in the coming quarters.
Thus, RES, one of the leading oilfield service providers, is poised for further upside in the coming days.
Phillips 66 (PSX - Free Report) is the leading player in each of its operations like refining, chemicals and midstream in terms of size, efficiency and strengths. PSX's operations include processing, transportation, storing and marketing fuels and products worldwide. Phillips 66 is currently valued at $33.9 billion and offers a quarterly dividend of 92 cents.
Phillips 66 is projected to see a year-over-year earnings surge of 569.7% in 2021. PSX currently has a Zacks Style Score of A for Value and B for Momentum. Phillips 66 beat the Zacks Consensus Estimate three times in the last four quarters and missed once, with an earnings surprise of 19.7%.
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 earnings for 2021 are expected to surge 286.1% year over year. PDCEbeat the Zacks Consensus Estimate in the last four quarters, ending with an earnings surprise of 51.06%, on average. As of Sep 30, 2021, PDC Energy had $1.7 billion in total liquidity, while its credit facility currently has a total borrowing base of $2.4 billion. Moreover, PDC Energy's debt maturity profile is favorable.
SM Energy Company (SM - Free Report) is one of the most attractive players in the exploration and production space. It engages in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. SM's operations focus on the Permian Basin, and the South Texas and Gulf Coast region. SM has 443,188 net acres under its possession, of which 33.5% is developed.
SM Energy's earnings for 2021 are expected to surge 739.1% year over year. SM currently has a Zacks Style Score of A for both Growth and Momentum. The upstream energy player beat the Zacks Consensus Estimate thrice in the last four quarters and missed once. SM Energy has a trailing four-quarter earnings surprise of 126.3%, on average.
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Here's Why it is Worth Investing in RPC (RES) Stock Right Now
RPC, Inc. (RES - Free Report) has witnessed upward earnings estimate revisions for 2021 in the past 60 days.
The stock of the company, currently carrying a Zacks Rank #2 (Buy), has jumped 49.8% year to date compared with 26.7% growth of the composite stocks belonging to the industry.
Factors Favoring the Stock
The West Texas Intermediate crude price, which is currently hovering around $75 per barrel, has significantly improved from its slump into negative territory in April 2020. Global growth prospects have improved significantly as vaccination rollouts led to increased fuel demand in a few large economies.
Increasing oil prices are encouraging explorers and producers to gradually return to shale plays. Thus, higher upstream activities are beneficial for RPC since it provides specialized oilfield services and equipment to almost all prospective oil and gas shale plays in the United States.
RPC expects its customers to respond to the favorable commodity pricing scenario. Hence, the company will plan for increased drilling and completion activities, which will translate into higher demand for its oilfield services and secure incremental cash flows.
For more than a decade, RPC has been reporting positive operating cash flows, reflecting stable operations despite a volatile commodity market. Since the beginning of the third quarter, the company has been witnessing higher customer demand for its pressure pumping services. This indicates that RPC's customer base is responding to higher commodity prices.
RPC initiated a horizontal pressure pumping fleet to meet the rising demand and expects higher activity in this service line for the remaining year. At the third quarter-end, RPC's Tier IV dual-fuel pressure pumping fleet came online in the Permian Basin. This is expected to boost the company's utilization rate and profits in the coming quarters.
Thus, RES, one of the leading oilfield service providers, is poised for further upside in the coming days.
Other Stocks to Consider
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.
Phillips 66 (PSX - Free Report) is the leading player in each of its operations like refining, chemicals and midstream in terms of size, efficiency and strengths. PSX's operations include processing, transportation, storing and marketing fuels and products worldwide. Phillips 66 is currently valued at $33.9 billion and offers a quarterly dividend of 92 cents.
Phillips 66 is projected to see a year-over-year earnings surge of 569.7% in 2021. PSX currently has a Zacks Style Score of A for Value and B for Momentum. Phillips 66 beat the Zacks Consensus Estimate three times in the last four quarters and missed once, with an earnings surprise of 19.7%.
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 earnings for 2021 are expected to surge 286.1% year over year. PDCEbeat the Zacks Consensus Estimate in the last four quarters, ending with an earnings surprise of 51.06%, on average. As of Sep 30, 2021, PDC Energy had $1.7 billion in total liquidity, while its credit facility currently has a total borrowing base of $2.4 billion. Moreover, PDC Energy's debt maturity profile is favorable.
SM Energy Company (SM - Free Report) is one of the most attractive players in the exploration and production space. It engages in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. SM's operations focus on the Permian Basin, and the South Texas and Gulf Coast region. SM has 443,188 net acres under its possession, of which 33.5% is developed.
SM Energy's earnings for 2021 are expected to surge 739.1% year over year. SM currently has a Zacks Style Score of A for both Growth and Momentum. The upstream energy player beat the Zacks Consensus Estimate thrice in the last four quarters and missed once. SM Energy has a trailing four-quarter earnings surprise of 126.3%, on average.