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The Zacks Analyst Blog Highlights: Continental Resources, Oasis Petroleum, Earthstone Energy and Matador Resources

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·6 min read
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For Immediate Release

Chicago, IL – July 8, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Continental Resources, Inc. CLR, Oasis Petroleum Inc. OAS, Earthstone Energy, Inc. ESTE and Matador Resources Company MTDR.

Here are highlights from Wednesday’s Analyst Blog:

4 Top Oil Stocks for Impressive Returns in 2nd Half of 2021

Energy companies recovered from last year when the coronavirus pandemic hit the global oil demand massively. Economies are now reopening with more people socializing and going to work, improving the outlook for fuel demand. This has bolstered optimism for oil players' significant earnings generations in the second half of this year.

Recovering Oil Price

The price of West Texas Intermediate (WTI) crude, trading at more than $70 per barrel mark, has improved drastically from the pandemic-hit April 2020, when oil was in the negative territory. With the massive coronavirus vaccine rollout, the demand for fuel will possibly improve further. This has paved the way for more recovery in the oil price.

Recently, the price of WTI crude touched its six-year high mark briefly and then retreated. The volatility in the commodity price signifies the tensions within the OPEC cartel since there are possibilities of some producers in the block to boost production in the coming months.

However, the volatility is not going to be a headwind. Notably, many analysts are expecting the cartel to reach a deal to gradually raise the output in the coming months, as higher production will match the increasing global consumption level.

Notably, the U.S. Energy Information Administration ("EIA") expects a relatively balanced oil market for the second half of this year. This is because increasing production will stop the continuous draw in the global crude oil inventory, added EIA.

Impressive Earnings Outlook

Soaring demand for fuel in the United States and other developed economies is improving energy companies' earnings outlooks. Per the Zacks Earnings Trends report, the energy sector will likely generate respective earnings of $17.8 billion and $16.7 billion in the third and fourth quarters of 2021, suggesting massive improvements from the prior-year comparable quarters.

Thus, most analysts are projecting fuel demand recovery to continue in the July-December period. Notably, the momentum started from the beginning of 2021 when countries commenced boosting their coronavirus vaccine arsenal to beat the pandemic.

In the March-end quarter of this year, the energy sector generated earnings of $10.7 billion, improving from $8.6 billion in the prior-year quarter. Also, the energy sector is likely to generate earnings of $15 billion in the June-end quarter of this year, whereas it reported $9.6 billion losses in the prior-year quarter.

4 Stocks in the Spotlight

Given the backdrop that the energy sector is recovering and is poised to generate significant earnings in the second half; it would be an opportune moment for investors to include oil stocks in the portfolio. We have employed our proprietary stock screener to zero down four oil stocks.

The companies currently sport a Zacks Rank #1 (Strong Buy) and are likely to generate impressive earnings in the third quarter and 2021.  You can see the complete list of today's Zacks #1 Rank stocks here.

Continental Resources is a leading producer of crude in the United States and, hence, is well-placed to cash in on the oil price rally. Notably, the company has a strong presence in the core of a prolific oil field — the Bakken play of North Dakota and Montana.

Along with the announcement of its first-quarter results, 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 trades at $60 per barrel. The projections suggest a significant year-over-year improvement from last year's $1.4-billion operating cashflow and $275-million free cashflow.

The stock has witnessed upward earnings estimate revisions for the third quarter and 2021 in the past seven days.

Oasis Petroleum has positioned itself exclusively in the Williston Basin, following the sale of its Permian assets. Considering the robust inventory life along with the scale and size of its operations, the company expects significant value creations for its shareholders.

Notably, in the past seven days, the stock has witnessed upward earnings estimate revisions for the third quarter and 2021.

Earthstone Energy is a leading upstream company, having a footprint in the core of the Midland Basin of west Texas and the Eagle Ford Trend of south Texas. By hedging 88% of 2021 oil production, the company is not exposed significantly to volatility in commodity prices.

In the past seven days, the stock has witnessed upward earnings estimate revisions for the third quarter and 2021.

Headquartered in Dallas, TX, Matador Resources has a strong footprint in the liquid-rich Delaware Basin's Wolfcamp and Bone Spring plays. The company is likely to see earnings growth of 560% and 366% in the third quarter and 2021, respectively.

Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It's bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is "Will you get into the right stocks early when their growth potential is greatest?"

Zacks has released a Special Report to help you do just that, and today it's free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

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Media Contact

Zacks Investment Research

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Continental Resources, Inc. (CLR) : Free Stock Analysis Report
Oasis Petroleum Inc. (OAS) : Free Stock Analysis Report
Matador Resources Company (MTDR) : Free Stock Analysis Report
Earthstone Energy, Inc. (ESTE) : Free Stock Analysis Report
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