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Encana (ECA) Gains But Lags Market: What You Should Know

Zacks Equity Research

Encana (ECA) closed the most recent trading day at $4.65, moving +0.22% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.47%. Elsewhere, the Dow lost 0.29%, while the tech-heavy Nasdaq added 0.85%.

Coming into today, shares of the energy company had lost 3.53% in the past month. In that same time, the Oils-Energy sector lost 1.63%, while the S&P 500 gained 2.08%.

Wall Street will be looking for positivity from ECA as it approaches its next earnings report date. This is expected to be July 31, 2019. On that day, ECA is projected to report earnings of $0.18 per share, which would represent a year-over-year decline of 14.29%. Meanwhile, our latest consensus estimate is calling for revenue of $1.75 billion, up 77.58% from the prior-year quarter.

ECA's full-year Zacks Consensus Estimates are calling for earnings of $0.66 per share and revenue of $6.36 billion. These results would represent year-over-year changes of -23.26% and +7.11%, respectively.

Any recent changes to analyst estimates for ECA should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 9.93% lower. ECA is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, ECA currently has a Forward P/E ratio of 6.98. For comparison, its industry has an average Forward P/E of 9.08, which means ECA is trading at a discount to the group.

Investors should also note that ECA has a PEG ratio of 0.95 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Exploration and Production - Canadian industry currently had an average PEG ratio of 1.26 as of yesterday's close.

The Oil and Gas - Exploration and Production - Canadian industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 160, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the 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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