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Oil Above $85, Chord Energy Up 58% in a Year: Is It Still a Buy?
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Key Takeaways
Chord Energy surged 57.9% in a year, outperforming industry peers.
CHRD raised its 2026 oil production guidance to 162,500 barrels per day.
CHRD trades at 2.73X EV/EBITDA and targets at least 75% free cash flow returns.
Chord Energy Corporation (CHRD - Free Report) has jumped 57.9% over the past year, outpacing the 22.6% growth of the industry and the 53.3% and 41% gains of ConocoPhillips (COP - Free Report) and EOG Resources Inc. (EOG - Free Report) , respectively, both of which belong to the same space.
Image Source: Zacks Investment Research
The outperformance might reflect strong market confidence in CHRD’s prospects, especially when the pricing scenario of oil is extremely favorable. However, for investment conclusions, one should have a thorough assessment of the company’s fundamentals, growth potential and prevailing market conditions.
Oil Price is Still High: Boon for CHRD’s Upstream Business
West Texas Intermediate (WTI) crude is trading at more than $85 per barrel, according to data from oilprice.com, owing to the persisting tensions in the Middle East. With CHRD generating a significant proportion of revenues from crude oil, the high price of the commodity is extremely favorable for the leading oil and gas exploration and production company, like other energy giants, such as COP and EOG.
To have a glimpse of its upstream operations, Chord Energy produces oil and natural gas from upstream assets in the Williston Basin’s Bakken region. Better performance from existing wells and improved drilling efficiency helped the company raise its 2026 oil production guidance twice, from 159,000 to 162,500 barrels per day—an increase of 3,500 barrels daily. Higher output supports sales volumes and cash generation, depending on commodity prices and costs. Management expressed confidence in maintaining this higher production level in 2027, with detailed guidance expected in February 2027.
The company has a low exposure to debt capital and hence can rely on its balance sheet to sail through all the business cycles efficiently. Compared to composite stocks in the industry, CHRD has lower debt exposure, reflected in a debt-to-capitalization of 15.2% compared with the industry’s 23.54%.
Image Source: Zacks Investment Research
Investors should also know that CHRD is committed to rewarding shareholders through cash dividends and share buybacks. Management said it is directing at least 75% of free cash flow, the money left after operating costs and investments, toward these returns. Buying back shares gives remaining investors a larger ownership stake, while maintaining a strong balance sheet remains a priority.
Should Investors Bet on the Stock?
Coming to the valuation story, CHRD is currently considered cheap on a relative basis, with the stock trading at a 2.73x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA), which is a discount compared with the broader industry average of 8.72x. CHRD also appears cheaper compared to upstream majors such as COP and EOG, which are currently trading at 5.87x and 5.34x trailing 12-month EV/EBITDA, respectively.
Image Source: Zacks Investment Research
Despite its strong share price performance, CHRD continues to trade at a discount to its industry peers, suggesting further upside potential. Its favorable fundamentals and attractive valuation make it worth considering.
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Oil Above $85, Chord Energy Up 58% in a Year: Is It Still a Buy?
Key Takeaways
Chord Energy Corporation (CHRD - Free Report) has jumped 57.9% over the past year, outpacing the 22.6% growth of the industry and the 53.3% and 41% gains of ConocoPhillips (COP - Free Report) and EOG Resources Inc. (EOG - Free Report) , respectively, both of which belong to the same space.
The outperformance might reflect strong market confidence in CHRD’s prospects, especially when the pricing scenario of oil is extremely favorable. However, for investment conclusions, one should have a thorough assessment of the company’s fundamentals, growth potential and prevailing market conditions.
Oil Price is Still High: Boon for CHRD’s Upstream Business
West Texas Intermediate (WTI) crude is trading at more than $85 per barrel, according to data from oilprice.com, owing to the persisting tensions in the Middle East. With CHRD generating a significant proportion of revenues from crude oil, the high price of the commodity is extremely favorable for the leading oil and gas exploration and production company, like other energy giants, such as COP and EOG.
To have a glimpse of its upstream operations, Chord Energy produces oil and natural gas from upstream assets in the Williston Basin’s Bakken region. Better performance from existing wells and improved drilling efficiency helped the company raise its 2026 oil production guidance twice, from 159,000 to 162,500 barrels per day—an increase of 3,500 barrels daily. Higher output supports sales volumes and cash generation, depending on commodity prices and costs. Management expressed confidence in maintaining this higher production level in 2027, with detailed guidance expected in February 2027.
CHRD’s Solid Balance Sheet & Strong Shareholder Commitments
The company has a low exposure to debt capital and hence can rely on its balance sheet to sail through all the business cycles efficiently. Compared to composite stocks in the industry, CHRD has lower debt exposure, reflected in a debt-to-capitalization of 15.2% compared with the industry’s 23.54%.
Investors should also know that CHRD is committed to rewarding shareholders through cash dividends and share buybacks. Management said it is directing at least 75% of free cash flow, the money left after operating costs and investments, toward these returns. Buying back shares gives remaining investors a larger ownership stake, while maintaining a strong balance sheet remains a priority.
Should Investors Bet on the Stock?
Coming to the valuation story, CHRD is currently considered cheap on a relative basis, with the stock trading at a 2.73x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA), which is a discount compared with the broader industry average of 8.72x. CHRD also appears cheaper compared to upstream majors such as COP and EOG, which are currently trading at 5.87x and 5.34x trailing 12-month EV/EBITDA, respectively.
Despite its strong share price performance, CHRD continues to trade at a discount to its industry peers, suggesting further upside potential. Its favorable fundamentals and attractive valuation make it worth considering.
CHRD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.