Production and Guidance - For Q4 2024, total barrels of oil equivalent (BOE) production exceeded guidance by over 3%, with total production reaching 682 MBoepd, surpassing the high end of guidance of 630 to 660 MBoepd[3] - 2025 total BOE production is projected to increase approximately 9% year-over-year, with oil volumes expected to rise by about 47%[9] - Full-year 2025 guidance for total equivalent production is projected between 710 MBoed and 770 MBoed, compared to 660 MBoed to 675 MBoed in 2024[70] - First quarter 2025 guidance for total equivalent production is projected between 710 MBoed and 750 MBoed, compared to 630 MBoed to 660 MBoed in the fourth quarter of 2024[71] - Net wells turned in line for the Permian Basin are expected to increase from 80 in 2024 to between 150 and 165 in 2025[70] Financial Performance - The company reported a net income of $297 million, or $0.40 per share, and adjusted net income of $358 million, or $0.49 per share for Q4 2024[8] - The company experienced a net income of $297 million for the quarter ended December 31, 2024, compared to $416 million in the same quarter of 2023, reflecting a decrease of approximately 29%[42] - Net income decreased to $1,121 million in 2024 from $1,625 million in 2023, a decline of 31%[67] - Adjusted net income for Q4 2024 was $358 million, compared to $387 million in Q4 2023, indicating a decrease of 7.5%[52] - Adjusted EBITDAX for Q4 2024 was $896 million, down 10.5% from $1,001 million in Q4 2023[61] - Adjusted EBITDAX for the twelve months ended December 31, 2024, was $3,414 million, down from $3,928 million in 2023[67] Capital Expenditures and Investments - Capital expenditures for Q4 2024 totaled $417 million, near the low end of the guidance range of $410 to $500 million[8] - The company expects 2025 capital expenditures to be between $2.1 billion and $2.4 billion, reflecting a 28% year-over-year increase at the midpoint[9] - Capital expenditures for drilling, completion, and other fixed asset additions totaled $425 million in Q4 2024, down from $468 million in Q4 2023[58] - Incurred capital expenditures for 2025 are expected to range from $2,100 million to $2,400 million, up from $1,750 million to $1,850 million in 2024[70] Shareholder Returns - Coterra announced a 5% dividend increase to $0.22 per share for Q4 2024, resulting in an annualized dividend of $0.88 per share, equating to a 3.1% yield[3] - Coterra's total shareholder returns for 2024 amounted to $1,086 million, representing 89% of the full-year Free Cash Flow[14] Debt and Liquidity - The company maintains a cash balance of $2.0 billion and total liquidity of approximately $5.0 billion, with a net debt to trailing twelve-month EBITDAX ratio of 0.4x[15] - Total long-term debt, net (excluding current maturities) rose to $3,535 million in 2024, compared to $1,586 million in 2023[45] - Total debt increased to $3,535 million in 2024 from $2,161 million in 2023, representing a 63.5% increase[64] - The company’s total debt to total capitalization ratio is a key measure for assessing leverage, with net debt calculated by subtracting cash and cash equivalents from total debt[62] - Total debt to total capitalization ratio rose to 21.2% in 2024 from 14.2% in 2023[64] - Net debt to adjusted capitalization ratio increased to 10.2% in 2024 from 8.5% in 2023[64] Production Costs and Prices - Average unit operating cost increased to $8.89/Boe in Q4 2024 from $8.41/Boe in Q4 2023, representing an increase of approximately 5.7%[32] - Coterra's total unit costs for Q4 2024 were $17.31/Boe, up from $16.00/Boe in Q4 2023, reflecting an increase of approximately 7.9%[32] - Average sales price for oil in Q4 2024 was $68.57/Bbl, down from $77.10/Bbl in Q4 2023, indicating a decline of approximately 11.9%[30] - Average sales price for natural gas (excluding hedges) in Q4 2024 was $2.02/Mcf, a slight decrease from $2.03/Mcf in Q4 2023[30] Production Volumes - In Q4 2024, total natural gas production was 2,778.9 Mmcf/day, down from 2,970.0 Mmcf/day in Q4 2023, representing a decrease of approximately 6.4%[29] - Oil production in Q4 2024 was 113.0 MBbl/day, an increase from 104.7 MBbl/day in Q4 2023, reflecting a growth of about 4.4%[29] - The average daily equivalent production for the company in Q4 2024 was 681.5 MBoepd, slightly down from 697.4 MBoepd in Q4 2023, a decrease of about 2.7%[29] - The company reported a total of 313 wells drilled for the full year 2024, up from 264 wells in 2023, an increase of approximately 18.6%[30] - The company drilled 74 gross wells in Q4 2024, compared to 66 gross wells in Q4 2023, marking an increase of about 12.1%[30] - The company’s average rig count in the Permian Basin was 8.7 in Q4 2024, compared to 7.0 in Q4 2023, indicating an increase of about 24.4%[30] Cash Flow - Total cash flow from operating activities for the twelve months ended December 31, 2024, was $2,795 million, down 23.6% from $3,658 million in 2023[56] - Discretionary cash flow for Q4 2024 was $776 million, compared to $881 million in Q4 2023, reflecting a decrease of 11.9%[56] - Free cash flow for the twelve months ended December 31, 2024, was $1,214 million, a decline of 8.9% from $1,332 million in 2023[56] - The net increase in cash, cash equivalents, and restricted cash for Q4 2024 was $1,429 million, significantly higher than $109 million in Q4 2023[47] Derivative Instruments - The company reported a gain (loss) on derivative instruments of $(51) million for the quarter ended December 31, 2024, compared to a gain of $101 million in the same quarter of 2023[42] - The weighted average floor price for NYMEX collars in the first quarter of 2026 is projected to be $2.75 per MMBtu, with a ceiling of $7.66 per MMBtu[37] - The weighted average price for WTI oil swaps in 2025 is set at $69.18 per Bbl for all quarters[36] - The weighted average ceiling price for NYMEX collars in the fourth quarter of 2025 is projected to be $5.55 per MMBtu[37]

Core Viewpoint - Coterra Energy (CTRA) has shown strong year-to-date performance, outperforming its peers in the Oils-Energy sector, which has implications for investors looking for opportunities in this industry [1][4]. Company Performance - Coterra Energy has gained approximately 12.3% year-to-date, while the average gain for stocks in the Oils-Energy group is about 5.5%, indicating superior performance [4]. - The Zacks Consensus Estimate for CTRA's full-year earnings has increased by 9.2% over the past three months, reflecting improved analyst sentiment and earnings outlook [3]. Industry Context - Coterra Energy is part of the Oil and Gas - Exploration and Production - United States industry, which consists of 34 stocks and currently ranks 49 in the Zacks Industry Rank. This industry has experienced an average loss of 12.6% year-to-date, further highlighting CTRA's strong performance relative to its peers [6]. - The Oils-Energy sector, which includes 247 individual stocks, holds a Zacks Sector Rank of 7, indicating a moderate strength compared to other sectors [2].

Core Insights - Coterra Energy (CTRA) is expected to report quarterly earnings of $0.42 per share, a decline of 19.2% year-over-year, with revenues forecasted at $1.4 billion, down 12.3% from the previous year [1] Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised upward by 11.7%, indicating analysts' reassessment of their initial forecasts [2] - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3] Revenue Projections - Analysts project 'Operating revenues- Oil' to reach $715.22 million, reflecting a decrease of 3.6% year-over-year [5] - 'Operating revenues- Natural gas' is expected to be $482.11 million, indicating a decline of 12.8% from the prior year [5] - 'Operating revenues- NGL' is forecasted at $215.37 million, showing an increase of 28.2% compared to the same quarter last year [5] - 'Operating revenues- Other' is estimated to be $20.50 million, down 35.9% year-over-year [6] Production Volumes - Total company production volumes are expected to reach 653.62 million barrels of oil equivalent per day, down from 697.4 MBOE/d a year ago [6] - Natural gas production volumes are projected at 2,623.03 million cubic feet per day, compared to 2,970 MMcf/d in the previous year [7] - Oil production volumes are estimated at 110.38 million barrels per day, up from 104.7 MBbl/d in the same quarter last year [7] Pricing Expectations - The average sales price for NGL is expected to be $20.18 per barrel, compared to $18.66 per barrel in the same quarter last year [8] - The average sales price for oil, excluding hedges, is projected to be $68.77 per barrel, down from $77.1 per barrel a year ago [8] Stock Performance - Over the past month, shares of Cabot have returned -6.6%, while the Zacks S&P 500 composite has increased by 4.7% [8] - CTRA currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near future [8]

Core Viewpoint - Coterra Energy is expected to report a decline in earnings and revenues for the fourth quarter of 2024, with strategic acquisitions and operational efficiencies positioning the company for long-term growth despite current challenges [1][2][8]. Financial Performance - The Zacks Consensus Estimate for Q4 2024 earnings per share (EPS) is 42 cents, reflecting a 19.2% decline year-over-year, while revenues are projected at $1.4 billion, indicating a 12.3% decrease [1][2]. - For the full year 2024, the revenue estimate stands at $5.5 billion, down 7.4% year-over-year, and the EPS estimate is $1.60, representing a contraction of approximately 29.2% [3]. Earnings Estimates - The current quarter's EPS estimate has been revised downward by one cent over the past 30 days, with a year-over-year growth estimate of -19.23% [2][4]. - The consensus for crude volume in Q4 is pegged at 110 thousand barrels per day, slightly up from 105 thousand barrels per day in the previous year [10]. Strategic Acquisitions - Coterra's acquisition of Franklin Mountain Energy and Avant Natural Resources for $3.95 billion enhances its position in the Permian Basin, allowing for longer, more efficient wells and reduced costs [8]. - The strategic shift towards oil-rich assets in the Delaware Basin is expected to capitalize on robust oil prices, with oil volumes surpassing guidance in the previous quarter [9]. Market Performance - Coterra's stock has risen 16% over the past six months, outperforming the S&P 500's 10% gain and reflecting growing investor confidence due to strategic expansion and operational execution [11]. - The company has a Zacks Value Score of B, with competitive valuation metrics such as an EV/EBITDA ratio and a price/earnings ratio around 9X forward earnings [14]. Future Outlook - Coterra is positioned for long-term growth with strategic acquisitions and operational efficiency, generating over $1 billion in free cash flow recently and maintaining a low debt-to-capitalization ratio of 13.7% [16]. - The company has secured NGL export contracts to Europe and Asia from 2027 to 2038, providing revenue diversification and stability against domestic market fluctuations [16][17].

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Coterra Energy (CTRA) due to lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Coterra Energy is expected to report quarterly earnings of $0.42 per share, reflecting a year-over-year decrease of 19.2% [3]. - Revenue projections stand at $1.4 billion, which is a 12.2% decline from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 11.67% higher in the last 30 days, indicating a reassessment by analysts [4]. - The revisions may not uniformly reflect the direction of all analysts' estimates [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model compares the Most Accurate Estimate to the Zacks Consensus Estimate, suggesting that recent estimate revisions may provide more accurate insights [5][6]. - A positive Earnings ESP reading is a strong indicator of an earnings beat, especially when combined with a favorable Zacks Rank [8]. Historical Performance - Coterra Energy's past performance shows that it has only beaten consensus EPS estimates once in the last four quarters [13]. - The company's surprise history indicates a tendency to miss expectations, as seen in the last reported quarter where it fell short by 5.88% [12]. Conclusion - While Coterra Energy is positioned as a potential earnings-beat candidate, other factors should also be considered before making investment decisions [16].

Industry Overview - The fourth-quarter 2024 earnings season for the Oil – Energy sector is underway, with S&P 500 energy companies projected to see a year-over-year earnings decline of 24.8%, despite a revenue increase of 2.1% [1] - Reported earnings so far are 33% lower than the same period last year, consistent with prior forecasts, following a 22.9% EPS drop in Q3, indicating ongoing challenges due to fluctuating commodity prices [1] Oil and Gas Prices - Crude oil prices have significantly decreased in Q4 2024 compared to the previous year, with average WTI prices falling from $85.64, $77.69, and $71.90 per barrel in Q4 2023 to $71.99, $69.95, and $70.12 per barrel in 2024, reflecting weaker demand and increased supply [2] - Natural gas prices exhibited mixed trends, with the U.S. Henry Hub averaging $2.20 in October, $2.12 in November, and rebounding to $3.01 in December 2024, showing some resilience in gas demand despite lower prices earlier in the quarter [3] Earnings Potential of Specific Stocks - Despite the overall weak earnings outlook for Q4, Magnolia Oil & Gas (MGY), Occidental Petroleum (OXY), and Coterra Energy (CTRA) are identified as stocks likely to outperform expectations [4] - All three companies possess a Zacks Momentum Score of A or B and a Zacks Rank of 3 (Hold), with positive Earnings ESP, indicating a high probability of earnings beats [5][6] Company Profiles - **Magnolia Oil & Gas**: An independent exploration and production operator focused on growth through acquisitions and active drilling, with strong unit metrics and financial health. It has an Earnings ESP of +1.73% and is set to release earnings on Feb. 18 [7][8] - **Coterra Energy**: An independent upstream operator primarily engaged in natural gas exploration and production, with a significant portion of its production coming from the Marcellus Shale. It has an Earnings ESP of +0.10% and is scheduled to release earnings on Feb. 24 [8][9] - **Occidental Petroleum**: An integrated oil and gas company with diverse operations, including basic chemicals and petrochemicals. It has an Earnings ESP of +3.00% and is also set to release earnings on Feb. 18 [10][11]

Group 1 - Coterra Energy's stock closed at $28.54, reflecting a +0.25% change from the previous trading day, outperforming the S&P 500's daily gain of 0.03% [1] - The stock has decreased by 0.49% over the past month, underperforming the Oils-Energy sector's gain of 0.76% and the S&P 500's gain of 4.19% [1] Group 2 - Coterra Energy is expected to release its earnings on February 24, 2025, with a predicted EPS of $0.42, indicating a 19.23% decline year-over-year, and revenue forecasted at $1.4 billion, down 12.13% from the prior-year quarter [2] Group 3 - Recent shifts in analyst projections for Coterra Energy should be monitored, as positive estimate revisions indicate analyst optimism regarding the company's business and profitability [3] - The Zacks Rank system, which incorporates estimate changes, provides actionable ratings, with 1 stocks historically delivering an average annual return of +25% since 1988 [4][5] Group 4 - Coterra Energy's current Forward P/E ratio is 8.58, which is lower than the industry average of 9.37, indicating a valuation discount [6] - The company's PEG ratio is currently 0.55, compared to the industry average of 1.33, suggesting favorable growth prospects relative to its valuation [7] Group 5 - The Oil and Gas - Exploration and Production - United States industry, which includes Coterra Energy, has a Zacks Industry Rank of 52, placing it in the top 21% of over 250 industries [7][8]

Core Viewpoint - Coterra Energy Inc. (CTRA) is showing potential for a bullish breakout due to a recent "golden cross" technical indicator and positive earnings outlook [1][4]. Technical Analysis - CTRA's 50-day simple moving average has crossed above its 200-day simple moving average, indicating a "golden cross" which is a bullish signal in trading [1][2]. - A golden cross typically consists of three stages: a downtrend followed by a crossover of the short-term moving average over the long-term moving average, and finally an upward price movement [3]. Performance Metrics - CTRA shares have increased by 17.7% over the past four weeks, suggesting strong upward momentum [4]. - The company currently holds a 3 (Hold) rating on the Zacks Rank, indicating potential for further price appreciation [4]. Earnings Outlook - There have been five upward revisions in earnings estimates over the past two months, with no downward revisions, reinforcing the bullish sentiment [4]. - The Zacks Consensus Estimate for CTRA has also increased, further solidifying the positive earnings outlook [4]. Investment Consideration - Given the technical indicators and positive earnings revisions, CTRA should be considered for inclusion on investors' watchlists [5].

Market Overview - A strong stock often rallies even when the broader market is under pressure, indicating potential future market leaders [1] - The robust labor market has reignited concerns about the Federal Reserve's ability to cut interest rates, leaving the S&P 500 near a critical support level [2] - Despite market uncertainty, select stocks like Coterra Energy, Constellation Energy, and United Airlines continue to demonstrate strength [3] Coterra Energy (CTRA) - Coterra Energy is a leading independent energy company focused on oil and natural gas exploration and production, operating in premier US basins such as the Permian Basin, Marcellus Shale, and Anadarko Basin [4] - The company has a Zacks Rank 1 (Strong Buy) with next quarter earnings estimates rising by 21.21% and next year's estimates jumping by 19.26% [5] - Coterra Energy shares have gained nearly 6% this week, driven by strength in natural gas prices and growing demand for energy, particularly from AI infrastructure expansion [6] - The company is trading at a PEG ratio below 1, indicating a potentially discounted valuation [6] Constellation Energy (CEG) - Constellation Energy is a leader in nuclear energy and a forward-looking utility company, benefiting from surging electricity demand driven by AI and data center expansion [9] - The company recently announced a $16.4 billion acquisition of Calpine, a major power generator specializing in natural gas and geothermal energy, with the total deal valued at $26.6 billion including assumed debt [10] - This acquisition enhances Constellation's geographic footprint and diversifies its energy portfolio, blending nuclear, natural gas, and geothermal sources [10] - Constellation Energy stock has rallied more than 150% over the last year and reached new record highs following the acquisition news [11] United Airlines (UAL) - United Airlines is benefiting from the recovery in consumer spending and the travel sector, with the strong US labor market further supporting demand for air travel [14] - The company has a Zacks Rank 1 (Strong Buy) due to improving fundamentals and raised earnings estimates [15] - United Airlines shares have shown strong momentum, breaking out to multi-year highs, and the company boasts a PEG ratio below 1, signaling a potentially discounted valuation relative to its growth prospects [16] Investment Opportunity - Coterra Energy, Constellation Energy, and United Airlines stand out as compelling opportunities due to their resilience, strong price momentum, and alignment with economic trends in energy demand and consumer spending [17] - These companies have strong earnings revisions, leadership in their industries, and favorable valuations, making them well-positioned to outperform in challenging market conditions [18]

The Oil – Energy sector is known for its unpredictable swings, with stock performance often hinged on volatile market conditions. This inherent unpredictability makes stock selection a challenging and sometimes risky endeavor. However, amid the uncertainty, there are standout performers.Let’s delve into three promising names — TechnipFMC plc (FTI) , Coterra Energy (CTRA) , and Sunoco LP (SUN) . These companies have demonstrated impressive EPS growth in recent years, positioning them as attractive buys at th ...