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Matador (MTDR) Stock Surges 53% YTD: Is More Upside Left?

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Matador Resources Company’s (MTDR - Free Report) shares have jumped 53% year to date (YTD) compared with the industry’s 40.4% growth. The Zacks Rank #3 (Hold) company has witnessed upward earnings estimate revisions for 2022 and 2023, respectively, in the past seven days.

Let’s delve into the factors behind the stock’s price appreciation.

What’s Favoring the Stock?

The price of West Texas Intermediate crude, trading at more than $85 per barrel mark, has improved drastically over the past year. Overall, improving oil prices are a boon for Matador’s upstream operations. This is because the company has a strong presence in oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. The company has been witnessing growing production while costs are declining. This reflects MTDR’s efficient operations.

For 2022, the upstream energy player expects total production of 36.9-38.3 million barrels of oil equivalent (MMBoE), higher than 31.5 MMBoE in 2021.

On another positive note, Matador plans to turn to sales a net of 71.2 wells this year, including operated and non-operated wells. Among the prime priorities that MTDR has set for this year are lowering debt levels, delivering free cashflows and maintaining or increasing dividends.

Although MTDR’s overall business is exposed to extreme volatility in oil price, plenty of room is left for the company to witness further gain in its stock price.

Zacks Investment Research
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Stocks to Consider

Better-ranked players in the same space include BP plc (BP - Free Report) , EQT Corporation (EQT - Free Report) and Eni SpA (E - Free Report) . While BP and Eni carry a Zacks Rank #2 (Buy), EQT sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The positive oil price trajectory is a boon for BP’s upstream operations. The favorable oil price scenario and increasing daily oil equivalent production volumes are aiding the energy giant’s bottom line. BP stated that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key new projects has been delivered.

In the core of gas-rich Marcellus and Utica Shales, EQT Corporation has a strong foothold. Being a leading producer of natural gas, EQT is benefiting from high natural gas price. For 2022, it is likely to witness earnings growth of 329.4%.

Eni is expecting the discovery of 700 million barrels of oil equivalent (BoE) of new exploration resources this year, suggesting an improvement from the prior guidance of 600 million BoE. For 2022, Eni is likely to witness earnings growth of 165.9%.

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