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Ecopetrol (EC) Stock Drops Despite Market Gains: Important Facts to Note

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In the latest trading session, Ecopetrol (EC - Free Report) closed at $8.93, marking a -3.35% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.52%. Meanwhile, the Dow gained 1%, and the Nasdaq, a tech-heavy index, added 0.52%.

Shares of the oil and natural gas exploration company have appreciated by 5.96% over the course of the past month, outperforming the Oils-Energy sector's gain of 5.34%, and the S&P 500's gain of 5.95%.

Analysts and investors alike will be keeping a close eye on the performance of Ecopetrol in its upcoming earnings disclosure. The company is expected to report EPS of $0.52, up 23.81% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $7.26 billion, reflecting a 12.73% fall from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.65 per share and revenue of $29.2 billion. These totals would mark changes of -0.6% and -10.82%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Ecopetrol. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Ecopetrol is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Ecopetrol has a Forward P/E ratio of 5.6 right now. Its industry sports an average Forward P/E of 10.85, so one might conclude that Ecopetrol is trading at a discount comparatively.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 27% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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