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Why Hold Strategy is Apt for Callon Petroleum (CPE) Stock Now

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Callon Petroleum Company has witnessed no earnings estimate revisions for its 2023 and 2024 earnings in the past seven days. The Zacks Consensus Estimate for this year is pegged at $7.92 per share.

What’s Favoring the Stock?

West Texas Intermediate crude price, trading at more than $75 per barrel, is highly favorable for exploration and production activities.

Being a leading exploration and production company, Callon Petroleum is well-positioned to capitalize on handsome crude prices. The firm, carrying a Zacks Rank #3 (Hold), has a strong footprint in Permian, the most prolific basin in the United States. Callon Petroleum has identified decade-long high-return drilling inventory in the Permian portfolio, brightening its production outlook.

CPE is also focused on greenhouse gas emissions and lowering routine flaring. Its new targets comprise strengthening its financials while deleveraging the balance sheet.

What’s Hurting it?

Compared with the 2.2% dividend yield of the composite stocks belonging to the industry, Callon Petroleum’s yield is 0%. Also, CPE is highly exposed to extreme volatility in commodity prices.

Stocks to Consider

Better-ranked players in the energy space include EOG Resources, Inc (EOG - Free Report) , Weatherford International plc (WFRD - Free Report) and Transportadora de Gas del Sur SA (TGS - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

EOG Resources, currently carrying a Zacks Rank #2, is a leading oil and natural gas exploration and production company. It is well-placed to capitalize on the promising business scenario. It has many undrilled premium locations, resulting in a brightened production outlook.

Weatherfordis a key energy player and is engaged in offering exclusive drilling technologies that will maximize clients’ reservoir exposure. Weatherford is also involved in well construction and completion activities in an efficient manner. 

Transportadora’s midstream asset portfolio has the most extensive natural gas pipeline network in Latin America. It generates stable fee-based revenues since its pipeline assets transport more than 60% of the gas consumed in Argentina.

Transportadora has witnessed upward estimate revisions for its 2024 bottom line in the past 30 days. The upward revisions are backed by the company’s stable business model and a strong focus on creating differential value for shareholders. Also, TGS has lower debt exposure than the composite stocks belonging to the industry.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

EOG Resources, Inc. (EOG) - free report >>

Transportadora De Gas Sa Ord B (TGS) - free report >>

Weatherford International PLC (WFRD) - free report >>

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