Here's Why Continental (CLR) is an Attractive Investment Bet Now
Continental Resources, Inc. CLR has witnessed upward earnings estimate revisions for 2021 and 2022 in the past seven days. Moreover, the stock, sporting a Zacks Rank #1 (Strong Buy), is likely to see earnings growth of more than 279.5% in 2021.
What’s Favoring the Stock?
The price of West Texas Intermediate (WTI) crude, trading at more than $68 per barrel mark, has improved drastically from the pandemic-hit April last year, when oil was in the negative territory. With coronavirus vaccines being rolled out at a massive scale, leading to gradual reopening of the economy, the demand for fuel will possibly improve further.
Overall, improving oil prices are definitely a boon for Continental’s upstream operations since the company is a leading producer of crude in the United States. Notably, the company has a strong presence in the core of a prolific oil field – the Bakken play of North Dakota and Montana. Moreover, the company has a strong focus on cost-reduction initiatives. Continental recently announced that it expects to lower Bakken well costs in 2021 by 7%.
Along with its first-quarter results announcements, the company said that it expects to generate $3.1 billion of operating cashflow and $1.7 billion of free cashflow for this year, considering WTI crude to trade at $60 per barrel. The projections reflect a significant year-over-year improvement from last year’s $1.4-billion operating cashflow and $275-million free cashflow.
Moreover, with significant cashflow generations, the company is targeting to lower its debt load below $4 billion by 2021-end. It is also to be noted that the company reinstated quarterly dividend, reflecting commitments to deliver returns to stockholders.
Continental Resources, Inc. Price
Continental Resources, Inc. price | Continental Resources, Inc. Quote
Other Stocks to Consider
Other prospective players in the energy space are Whiting Petroleum Corporation WLL, Callon Petroleum Company CPE and PDC Energy, Inc. PDCE. All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Callon Petroleum is expected to witness earnings growth of 129% in 2021.
PDC Energy is likely to see earnings growth of 123.7% in 2021.
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