Southwestern Energy (SWN) Surges 7.3%: Is This an Indication of Further Gains?
Southwestern Energy (SWN) shares rallied 7.3% in the last trading session to close at $6.87. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.1% gain over the past four weeks.
The surge in SWN stock price can be attributed to its potential merger deal with Chesapeake Energy. The deal is expected to be announced as early as next week, positioning the combined companies to become the largest gas producer in the United States. Given SWN’s Q3 gas production of approximately 4 billion cubic feet per day (bcf/day) and Chesapeake’s production of 3.4 bcf/day, the merger holds the potential to create a formidable entity in the market. The heightened anticipations surrounding the reported merger discussions generate optimism about the future prospects and synergies of the combined entity, further driving the stock price.
This independent oil and gas company is expected to post quarterly earnings of $0.14 per share in its upcoming report, which represents a year-over-year change of -46.2%. Revenues are expected to be $1.53 billion, down 54.8% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Southwestern Energy, the consensus EPS estimate for the quarter has been revised 5.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SWN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Southwestern Energy belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, EQT Corporation (EQT), closed the last trading session 1.3% higher at $38.71. Over the past month, EQT has returned 3.3%.
EQT Corporation's consensus EPS estimate for the upcoming report has changed -4.4% over the past month to $0.50. Compared to the company's year-ago EPS, this represents a change of +19.1%. EQT Corporation currently boasts a Zacks Rank of #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwestern Energy Company (SWN) : Free Stock Analysis Report
EQT Corporation (EQT) : Free Stock Analysis Report
