U.S. Markets closed

The Zacks Analyst Blog Highlights: Matador, Continental Resources, Pioneer Natural, Diamondback and Concho

Zacks Equity Research
Let's see if Roche Holding (RHHBY) stock is a good choice for value-oriented investors right now from multiple angles.

For Immediate Release

Chicago, IL –March 5, 2019 – 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: Matador Resources Company MTDR, Continental Resources, Inc. CLR, Pioneer Natural Resources Company PXD, Diamondback Energy, Inc. FANG and Concho Resources Inc. CXO.

Here are highlights from Monday’s Analyst Blog:

Shale Oil Q4 Earnings Falter on Commodity Price Meltdown

With the fourth-quarter earnings season over, it’s time to sit back and analyze the bevy of shale bigwigs just put in their reports. Most of them reported profits that improved in the fourth quarter compared to the same period a year before, aided along by strong production growth. At the same time, a number of them missed the Zacks Consensus Estimate on weaker commodity prices.

In this writeup, we dive into the results from Matador Resources Company, Continental Resources, Inc., Pioneer Natural Resources Company, Diamondback Energy, Inc. and Concho Resources Inc.

MTDR

Matador Resources is an independent oil and natural gas exploration and production company with focus on shale plays in the Eagle Ford and Permian basins. 

Earnings & Revenue:The company reported fourth-quarter adjusted earnings per share of 37 cents, ahead of the Zacks Consensus Estimate of 27 cents and the year-ago profit of 25 cents. The outperformances were driven by strong production and natural gas pricing gains.

Total revenues at the Dallas, TX-based energy explorer was $289.9 million, up around 88% from a year ago. Sales also beat the Zacks Consensus Estimate of $201 million.

Production:The production of oil and natural gas averaged a record 55,536 oil-equivalent barrels per day (BOE/d) (60% oil), up 27% from last year. Results were also above the Zacks Consensus Estimate of 54,843 BOE/d.

Realized Prices: Realized oil prices were slightly lower than expected at $49.09 per barrel. Matador Resources sold natural gas at $3.47 per thousand cubic feet (Mcf) as against our projection of $3.30 per Mcf.

Guidance:Matador Resources expects its average daily production to increase 3-4% sequentially in the first quarter.

Share Price Impact: The company's shares were largely unmoved as the all-round quarterly beat was offset by the lower oil output projection and a likely 2019 pending in excess of cash flow.

CLR

Continental Resources is an independent oil and gas company with principal operations in the STACK & SCOOP plays in central Oklahoma and the Bakken/Three Forks formations of North Dakota and Montana.

Earnings & Revenue: The company reported fourth-quarter adjusted earnings per share of 54 cents, lagging the Zacks Consensus Estimate of 59 cents due to lower oil equivalent price realizations and higher operating expenses. However, Continental Resources’ bottom line improved from the year-ago quarter's earnings of 41 cents per share, driven by higher production from the North Dakota Bakken as well as SCOOP and STACK regions.

Total revenues at the Oklahoma City, OK-based energy explorer was $1.1 billion, up 10% from a year ago and missed the Zacks Consensus Estimate by 1.5%.

Production:The production of oil and natural gas averaged 324,001 BOE/d (58% oil), up 13% from last year. Overall volumes were also above the Zacks Consensus Estimate.

Realized Prices: At $50.06 per barrel, realized oil prices fell well short of the Zacks Consensus Estimate of $62. Continental Resources sold natural gas at $3.26 per Mcf as against our projection of $3.37 per Mcf.

Guidance:Continental Resources expects its 2019 average daily production to be roughly 328,000 BOE/d.

Share Price Impact: The company's shares plunged more than 5% following the earnings disappointment with the main culprits being the soft commodity price realizations and the lofty fourth quarter capital expenditure of $742.6 million.

PXD

Pioneer Natural Resources is a large independent oil and gas exploration and production company with focus on the Spraberry field in the Permian Basin and the Eagle Ford Shale in South Texas.  

Earnings & Revenue:The Zacks Rank #3 (Hold) company reported fourth-quarter adjusted earnings per share of $1.18, lower than the Zacks Consensus Estimate of $1.40 and lagged the year-ago profit of $1.22, primarily due to lower realized prices from oil and natural gas.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Total revenues at the Irving, TX-based energy explorer was $2.7 billion, jumping 75% from a year ago and ahead of the Zacks Consensus Estimate of $2.3 billion, thanks to higher activities in the prolific Permian Basin.

Production:The production of oil and natural gas averaged 319,633 BOE/d (82% liquids), up 5% from last year. Results were in line with the Zacks Consensus Estimate.

Realized Prices: On an oil equivalent basis, average realized price was $38.16 per barrel in the reported quarter, compared with $38.68 a year ago. Moreover, realizations failed to match the Zacks Consensus Estimate of $51.

Guidance:Pioneer Natural, which plans to operate exclusively in the Permian Basin and is in the process of selling its other assets, expects Permian production between 302,000 BOE/d and 317,000 BOE/d in the first quarter of 2019.

Share Price Impact: Notwithstanding the weak earnings performance, the company's shares rose more than 1% in the aftermath the report. Apart from strong volumes, investors welcomed Pioneer Natural’s lower-than-expected capital expenditure guidance for 2019 and the dividend increase.

FANG

Diamondback Energy focuses on growth through a combination of acquisitions and active drilling in the lucrative Permian Basin spread over west Texas and New Mexico. 

Earnings & Revenue: The company reported fourth-quarter adjusted earnings per share of $1.21, below the Zacks Consensus Estimate of $1.62 and the comparable 2017 period profit of $1.56 on lower realized prices.

Total revenues at the Midland, TX-based energy explorer was $633.1 million, coming below the Zacks Consensus Estimate of $663 million but increased 58.6% year over year on strong production.

Production:The production of oil and natural gas averaged 182,785 BOE/d (71% oil), up 97% from last year. Results were also above the Zacks Consensus Estimate of 171,500 BOE/d.

Realized Prices: Average realized crude price was $45.51 per barrel in the reported quarter, compared with $53.59 a year ago. Moreover, oil realizations failed to match the Zacks Consensus Estimate of $50.

Guidance:Diamondback is forecasting full-year output range of 275,000-290,000 BOE/d, of which 68-70% is oil.

Share Price Impact: The company's shares inched up 1% despite the earnings underperformance as investors chose to concentrate on the quarterly production beat and slightly lower capital spending projection for 2019.

CXO

Concho Resources is an independent oil and gas exploration and production company with producing properties mainly in the Permian Basin of southeast New Mexico and West Texas.

Earnings & Revenue:The company reported adjusted net earnings per share of 94 cents, lagging the Zacks Consensus Estimate of $1.10 due to lower average oil sales price.

But the bottom line improved significantly from the prior-year quarter’s adjusted income of 66 cents per share. The improvement came on the back of robust production growth.

Total operating revenues for the fourth quarter amounted to $1.1 billion, which increased substantially from $780 million a year ago. The top line at the Midland, TX-based energy explorer, though, could not surpass the Zacks Consensus Estimate of $1.2 billion.

Production:The production of oil and natural gas averaged 307,097 BOE/d (65% oil), up 45% from last year. However, volumes were below the Zacks Consensus Estimate of 309,577 BOE/d.

Realized Prices: Average realized crude price was $49.10 per barrel in the reported quarter, compared with $52.84 a year ago, considerably below the Zacks Consensus Estimate of $60.

Guidance:Concho Resources expects production between 300,000 BOE/d and 306,000 BOE/d in the first quarter of 2019.

Share Price Impact: Following the headline misses, the company's shares plunged more than 8.5%. Apart from the production and pricing numbers coming in below expectations, investors were also worried about the company's reduced oil production growth guidance for 2019.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

See Stocks Today >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com                                      

https://www.zacks.com

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.


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
 
Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
 
Concho Resources Inc. (CXO) : Free Stock Analysis Report
 
Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report
 
Matador Resources Company (MTDR) : Free Stock Analysis Report
 
Continental Resources, Inc. (CLR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research