Here's Why Hold Strategy is Apt for Matador (MTDR) Stock
Matador Resources Company MTDR has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. For this year, the Zacks Consensus Estimate for the firm’s earnings per share is pegged at $6.98.
What’s Favoring the Stock?
The price of West Texas Intermediate crude, trading at more than $70 per barrel, is still favorable for the exploration and production activities of Matador. This is because MTDR, carrying a Zacks Rank #3 (Hold), has a strong presence in oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin.
Handsome crude price is likely to aid it in increasing production volumes. For 2023, the upstream energy player expects total production close to the high end of the guidance of 44.35-46.25 million barrels of oil equivalent (MMBoE), higher than 38.5 MMBoE in 2022. Since 2019, total production has been increasing consistently, contributing to the top and bottom lines.
On another positive note, Matador plans to turn to sales a net of 97.5 wells this year — including operated and non-operated wells. Its prime priorities include lowering debt, delivering free cashflows and maintaining or increasing dividends.
However, rising lease operating expenses are hurting the company’s bottom line. Also, being an upstream energy player, Matador’s business is highly vulnerable to extreme volatility in commodity prices.
Stocks to Consider
Better-ranked players in the energy space include Murphy USA Inc. MUSA, Sunoco LP SUN and Dril-Quip, Inc. DRQ. While Murphy USA and Dril-Quip carry a Zacks Rank #2 (Buy), Sunoco sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is a leading retailer of gasoline. MUSA has more than 1,700 stores and has witnessed upward earnings estimate revisions for 2023 earnings in the past seven days.
Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model. For this year, SUN has witnessed upward earnings estimate revisions in the past seven days.
Dril-Quip is a leading provider of highly engineered equipment, service and innovative technologies that are being employed in the energy sector.
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Dril-Quip, Inc. (DRQ) : Free Stock Analysis Report
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Matador Resources Company (MTDR) : Free Stock Analysis Report
