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The Zacks Analyst Blog Highlights: DCP Midstream, Abraxas Petroleum, Matador Resources and NuStar Energy

Zacks Equity Research
·6 min read

For Immediate Release

Chicago, IL – November 11, 2020 – 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: DCP Midstream, LP DCP, Abraxas Petroleum Corporation AXAS, Matador Resources Company MTDR and NuStar Energy L.P. NS.

Here are highlights from Tuesday’s Analyst Blog:

4 Top-Ranked Energy Stocks to Scoop Up After Vaccine Rally

Oil surged on Monday, posting its largest daily gain in more than five months. Both WTI and Brent crude rose about 8%, marking their strongest one-day increase since mid-May after drugmakers Pfizer and BioNTech announced successful data from their COVID-19 vaccine study.

Oil Prices Jump

In New York, WTI futures was 8.5% higher at $40.29 a barrel, while international oil prices rose 7.5% to settle at $42.40. This was due primarily to the better-than-expected interim data from a large clinical trial of experimental coronavirus vaccine — BNT162b2. Pharma giant Pfizer and its German partner BioNTech claimed 90% efficacy in preventing COVID-19 cases without any serious safety issue. The breakthrough, which brightens chances of the drug’s emergency approval before the year-end, boosted stock markets worldwide with the Dow, the S&P and the Nasdaq all hitting record highs.

For oil in particular, the development holds out hope toward protection against the deadly pandemic that has crushed the commodity’s demand and caused a bloodbath for the energy-related stocks. A potential treatment is expected to revive economic and transport activity, leading to stronger crude usage.

Oil’s burst yesterday was also supported by signals from OPEC+ kingpin Saudi Arabia about tweaking the supply cut agreement in a way to balance the market. 

4 Energy Firms Moving Higher

The sector ETF is still down 45% year to date and remains one of the three S&P 500 sectors in the red for the year. In fact, energy has been the worst-performing component of the benchmark index so far this year as it continues to struggle with the demand destruction associated with COVID-19-related containment measures. But encouraging news on the vaccine front could well be a precursor to a spike in oil consumption by aiding the economic recovery. In other words, yesterday’s medical breakthrough is seen as a big positive for the hard-hit sector.

Below we present four energy stocks which notched up strong gains on Monday and carry a Zacks Rank of #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DCP Midstream: The integrated midstream partnership, carrying a Zacks Rank #1, has done a fairly admirable job at reducing costs. Its cash outflows decrease as capital expenditure continues to fall with a tight leash on spending levels. Apart from significant capital cuts, the partnership should realize sizable savings from halving the distribution.

Over 30 days, DCP Midstream has seen the Zacks Consensus Estimate for 2020 improve 2.5%. The midstream operator’s units increased by 14.9% on Monday.

Abraxas Petroleum: This upstream operator is primarily focused on the southeastern Delaware Basin and the Williston Basin. Abraxas Petroleum has an enviable production record at a CAGR of 16% since 2013. The company’s deep inventory of acreage in prime locations is its real asset.

Over 30 days, the company has seen the Zacks Consensus Estimate for 2020 surge 93.9%. This Zacks Rank #2 stock jumped 13.8% on Oct 9.

Matador Resources: Matador Resources is an oil and gas exploration and production company with activities in the Delaware Basin of Texas/New Mexico, the Eagle Ford Shale, and the Haynesville Shale. The firm’s high-quality asset base, strong hedging portfolio and a robust balance sheet should aid it in facing the tough operating environment.

Over 30 days, Zacks Rank #2 Matador Resources has seen the Zacks Consensus Estimate for 2020 surge 191.7%. The company’s shares increased 28.4% on Monday.

NuStar Energy: The company looks well positioned for growth as its diversified asset base, strong pipeline of organic growth projects and contribution from acquisitions bode well and have boosted the partnership’s distributable cash flows.

The 2021 Zacks Consensus Estimate for NuStar Energy indicates 147.1% earnings per unit growth over 2020. This Zacks Rank #2 stock jumped 16.8% on Oct 9.

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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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