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Vaalco Energy (EGY) Moves 15.6% Higher: Will This Strength Last?

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Vaalco Energy (EGY - Free Report) shares ended the last trading session 15.6% higher at $8.60. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 13.8% gain over the past four weeks.

Vaalco Energy ended sharply higher on Tuesday, driven by high crude prices spurred by curbs on Russia, plus a demand spike owing to the reopening of economies and a rebound in activity. The steady increase in commodity prices to over $100 a barrel has pushed drilling activity higher and contributed to the strength in Vaalco Energy, whose productive capacity is based offshore West Africa. The company’s shares have also been buoyed by the recent addition to the Russell 3000 index. Besides, an improving demand landscape prompted Roth Capital to raise the price target on Vaalco Energy.

This oil and natural gas explorer is expected to post quarterly earnings of $0.80 per share in its upcoming report, which represents a year-over-year change of +471.4%. Revenues are expected to be $97.64 million, up 107.7% 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 Vaalco Energy, the consensus EPS estimate for the quarter has been revised 95.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on EGY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Vaalco Energy belongs to the Zacks Oil and Gas - Exploration and Production - International industry. Another stock from the same industry, Kosmos Energy (KOS - Free Report) , closed the last trading session 3.5% higher at $6.80. Over the past month, KOS has returned -8.4%.

For Kosmos Energy, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.22. This represents a change of +833.3% from what the company reported a year ago. Kosmos Energy currently has a Zacks Rank of #3 (Hold).


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