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W&T Offshore, Inc. (WTI) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of W&T Offshore (WTI - Free Report) ? Shares have been on the move with the stock up 24.7% over the past month. The stock hit a new 52-week high of $9.16 in the previous session. W&T Offshore has gained 178.3% since the start of the year compared to the 43.3% move for the Zacks Oils-Energy sector and the 64.4% return for the Zacks Oil and Gas - Exploration and Production - United States industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 8, 2022, W&T reported EPS of $1.32 versus consensus estimate of $0.37.
For the current fiscal year, W&T is expected to post earnings of $1.95 per share on $904.64 million in revenues. This represents a 747.83% change in EPS on a 62.12% change in revenues. For the next fiscal year, the company is expected to earn $1.51 per share on $860.42 million in revenues. This represents a year-over-year change of -22.31% and -4.89%, respectively.
Valuation Metrics
Though W&T has recently hit a 52-week high, what is next for W&T? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
W&T has a Value Score of B. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 4.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 6X. On a trailing cash flow basis, the stock currently trades at 8.4X versus its peer group's average of 6.7X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, W&T currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if W&T fits the bill. Thus, it seems as though W&T shares could still be poised for more gains ahead.
How Does WTI Stack Up to the Competition?
Shares of WTI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Cheniere Energy, Inc. (LNG - Free Report) . LNG has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Cheniere Energy, Inc. beat our consensus estimate by 42.86%, and for the current fiscal year, LNG is expected to post earnings of $20.02 per share on revenue of $32.24 billion.
Shares of Cheniere Energy, Inc. have gained 1.5% over the past month, and currently trade at a forward P/E of 17.46X and a P/CF of 27.78X.
The Oil and Gas - Exploration and Production - United States industry may rank in the bottom 53% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for WTI and LNG, even beyond their own solid fundamental situation.
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W&T Offshore, Inc. (WTI) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of W&T Offshore (WTI - Free Report) ? Shares have been on the move with the stock up 24.7% over the past month. The stock hit a new 52-week high of $9.16 in the previous session. W&T Offshore has gained 178.3% since the start of the year compared to the 43.3% move for the Zacks Oils-Energy sector and the 64.4% return for the Zacks Oil and Gas - Exploration and Production - United States industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 8, 2022, W&T reported EPS of $1.32 versus consensus estimate of $0.37.
For the current fiscal year, W&T is expected to post earnings of $1.95 per share on $904.64 million in revenues. This represents a 747.83% change in EPS on a 62.12% change in revenues. For the next fiscal year, the company is expected to earn $1.51 per share on $860.42 million in revenues. This represents a year-over-year change of -22.31% and -4.89%, respectively.
Valuation Metrics
Though W&T has recently hit a 52-week high, what is next for W&T? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
W&T has a Value Score of B. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 4.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 6X. On a trailing cash flow basis, the stock currently trades at 8.4X versus its peer group's average of 6.7X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, W&T currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if W&T fits the bill. Thus, it seems as though W&T shares could still be poised for more gains ahead.
How Does WTI Stack Up to the Competition?
Shares of WTI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Cheniere Energy, Inc. (LNG - Free Report) . LNG has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Cheniere Energy, Inc. beat our consensus estimate by 42.86%, and for the current fiscal year, LNG is expected to post earnings of $20.02 per share on revenue of $32.24 billion.
Shares of Cheniere Energy, Inc. have gained 1.5% over the past month, and currently trade at a forward P/E of 17.46X and a P/CF of 27.78X.
The Oil and Gas - Exploration and Production - United States industry may rank in the bottom 53% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for WTI and LNG, even beyond their own solid fundamental situation.