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Continental (CLR) Jumps 30.7% QTD: What's Driving the Rally?

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Zacks Equity Research
·3 min read
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Shares of Continental Resources, Inc. CLR have jumped 30.7% quarter to date (QTD) versus the energy sector’s 25.2% growth. Notably, the Zacks Rank #3 (Hold) stock has witnessed upward estimate revisions for 2020 and 2021 bottom lines in the past 60 days.

Let’s delve into the factors behind the stock’s price appreciation.

What’s Favoring the Stock?

Although the price of West Texas Intermediate (WTI) crude, which recently crossed $46 per barrel, is significantly below the 2020-beginning level of more than $60, it has improved considerably over the past few months. The momentum is likely to continue since the market has witnessed the impact of positive vaccine results.

With several vaccines in development seeing success, the outlook for the overall energy market is getting brighter. The positive vaccine data raised hopes that fuel demand will recover considerably once majority of people in the world get vaccinated. Thus, possibilities of energy, now a beaten-down sector, rebounding by next year are high. Overall, improving oil prices are definitely a boon for Continental, which is now among the top 10 crude producers in the domestic market. In the prolific Bakken play of North Dakota and Montana, the company is the largest producer of crude oil.  

The company is also focusing on debt-reduction initiatives. From $7.1 billion in total debt as of 2015-end, the leading oil producer expects its total debt to reduce to less than or equal to $4 billion by 2023. Continental is also trying to maximize free cash flow while reducing its debt burden.

Stocks to Consider

A few better-ranked players in the energy space include Summit Midstream Partners, LP SMLP, DCP Midstream, LP DCP and HighPoint Resources Corporation HPR. These stocks sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Summit Midstream has seen upward earnings estimate revisions for 2020 in the past seven days.

DCP Midstream has seen upward estimate revisions for 2020 bottom line in the past 30 days.

HighPoint is likely to see earnings growth of 167.5% in 2020.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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Continental Resources, Inc. (CLR) : Free Stock Analysis Report
Summit Midstream Partners, LP (SMLP) : Free Stock Analysis Report
DCP Midstream Partners, LP (DCP) : Free Stock Analysis Report
HIGHPOINT RESOURCES CORP (HPR) : Free Stock Analysis Report
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Zacks Investment Research