Equinor ASA ( EQNR Quick Quote EQNR - Free Report) has witnessed upward earnings estimate revisions for 2024 in the past 60 days.
The Zacks Rank #3 (Hold) stock’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering a surprise of 11.4%, on average.
What’s Favoring the Stock?
Despite uncertainties prevailing in the energy market on fears of recession, oil prices are highly favorable for exploration and production activities. Hence, the business prospects for Equinor’s upstream operations look promising. The company is expecting oil and gas production growth of 3% for 2023.
Equinor made three commercial discoveries in the first quarter, making its production outlook bright. Two of the discoveries were in the Troll area in the North Sea, where the company agreed to acquire a further equity interest in five discoveries. Equinor has been awarded 26 new production licenses on the Norwegian Continental Shelf.
Equinor is strongly focused on returning capital to stockholders. For 2023, EQNR has increased its share repurchase program to up to $6 billion. Equinor’s board increased its ordinary cash dividend to 30 cents per share, up 50% sequentially.
The integrated energy firm is also leading energy transitions. Equinor’s key strategy is to capitalize on the renewable energy space and align operations with the Paris Climate Agreement. It is planning to become a net-zero emissions player by 2050.
The integrated energy firm is planning to reduce net carbon intensity by 20% and 40% by 2030 and 2035, respectively. The company’s production from renewable energy sources was 524 gigawatt-hours in the first quarter, up year over year.
Thus, the Equinor stock appears to be a solid bet now, based on the strong fundamentals and compelling business prospects.
Equinor’s balance sheet has significant debt exposure compared with the composite stocks belonging to the industry, which can affect its financial flexibility.
Some better-ranked players in the energy space are
Enterprise Products Partners LP ( EPD Quick Quote EPD - Free Report) , Sunoco LP ( SUN Quick Quote SUN - Free Report) and Murphy USA Inc. ( MUSA Quick Quote MUSA - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here
Enterprise Products reported first-quarter 2023 adjusted earnings per limited partner unit of 64 cents, which beat the Zacks Consensus Estimate of 62 cents. This was primarily due to higher contributions from the Natural Gas Pipelines & Services business.
In the first quarter, Enterprise Products generated an adjusted free cash flow of $1,347 million against a negative free cash flow of $1,618 million in the year-ago quarter. EPD recorded a distributable cash flow of $863 million in the same time frame.
Sunoco reported first-quarter 2023 earnings of $1.41 per unit, beating the Zacks Consensus Estimate of $1.21. Better-than-expected quarterly earnings were primarily driven by higher contributions from the Fuel Distribution and Marketing segment.
For 2023, SUN revised its adjusted EBITDA guidance upward to $865-$915 million from the previously mentioned $850-$900 million.
Murphy USA announced first-quarter 2023 earnings per share of $4.80, which beat the Zacks Consensus Estimate of $4.06. The outperformance can be attributed to higher volumes and retail fuel contribution.
MUSA is committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the motor fuel retailer recently approved a repurchase authorization of up to $1.5 billion following the completion of the existing $1-billion mandate. The move underscores MUSA’s sound financial position and commitment to rewarding its shareholders.