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Viper Energy (VNOM) Moves 6.9% Higher: Will This Strength Last?

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Viper Energy Partners (VNOM - Free Report) shares rallied 6.9% in the last trading session to close at $23.99. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.7% gain over the past four weeks.

Increased optimism over the accelerated recovery in the energy sector following the massive oil price improvement primarily drove the stock. The fresh decisions by OPEC+ to continue to pump more oil have further reassured that the effect that Omicron could have on fuel demand will possibly be mild. OPEC+ has decided that in February, they will increase their output collectively by another 400,000 barrels a day. The decision of OPEC+ has induced fresh momentum to the crude price rally. Having mineral and royalty interests in Permian, the most prolific basin in the United States, the partnership is well positioned to capitalize on the rapidly improving oil price.

This oil and gas company is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of +66.7%. Revenues are expected to be $128.11 million, up 67.9% 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 Viper Energy, the consensus EPS estimate for the quarter has been revised 0.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on VNOM 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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