We are now midway through the fourth-quarter 2024 earnings season for the Oil – Energy sector, and results are unfolding as expected. Earnings for the S&P 500 energy companies are projected to decline 24.8% year over year, even as revenues edge up 2.1%. So far, reported earnings have come in 33% lower than the same period last year, aligning with prior forecasts. This follows the 22.9% EPS drop in Q3, reflecting the continued challenges for the sector amid fluctuating commodity prices.
Crude oil prices faced significant headwinds in Q4 2024, marking a noticeable drop compared to the previous year. According to the U.S. Energy Information Administration, average WTI crude prices for October, November and December 2023 were $85.64, $77.69, and $71.90 per barrel, respectively. In contrast, during the same months in 2024, prices fell to $71.99, $69.95, and $70.12 per barrel — a clear sign of weaker demand and increased supply.
Meanwhile, natural gas prices showed mixed trends. The U.S. Henry Hub averaged $2.20 in October, $2.12 in November, and rebounded to $3.01 in December 2024. While the early months saw lower prices than in 2023 ($2.98, $2.71, and $2.52), the late uptick in December suggests some resilience in gas demand.
While the overall picture for Q4 energy earnings remains weak, a few stocks are positioned to deliver strong results and could rally after their reports. Three stocks with momentum potential set to beat on earnings later this month are Magnolia Oil & Gas MGY, Occidental Petroleum OXY and Coterra Energy CTRA.
All three companies carry a Zacks Momentum Score of either A or B. Additionally, these stocks hold a Zacks Rank of #3 (Hold) and has a positive Earnings ESP.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better (Rank #1 or 2) and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Magnolia Oil & Gas: It is an independent exploration and production operator, with the Eagle Ford Shale and Austin Chalk formations in South Texas being its chief operating regions. The company focuses on growth through a combination of acquisitions and active drilling. Further, Magnolia has done a commendable job of enhancing its unit metrics, leading to attractive margins. MGY is also financially healthy, with modest debt and solid liquidity.
Magnolia Oil & Gas has an Earnings ESP of +1.73% and a Momentum Score of A. The firm is scheduled to release earnings on Feb. 18.
Coterra Energy: It is an independent upstream operator primarily engaged in the exploration, development and production of natural gas. Headquartered in Houston, TX, the firm owns some 183,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. The Zacks Rank #3 company’s share of natural gas in its overall production is around 65%.
Coterra Energy has an Earnings ESP of +0.10% and a Momentum Score of B. The firm is scheduled to release earnings on Feb. 24.
Occidental Petroleum: Houston, TX-based Occidental Petroleum Corporation is an integrated oil and gas company with significant exploration and production exposure. The #3 Ranked company is also a producer of a variety of basic chemicals, petrochemicals, polymers and specialty chemicals. The acquisition of CrownRock, strategic investments, cost management, strength in international operations, low-cost operations and Permian Basin exposure boost its performance.
Occidental Petroleum has an Earnings ESP of +3.00% and a Momentum Score of A. The firm is scheduled to release earnings on Feb. 18.
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Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report
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