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 ...

Natural gas prices were on a rollercoaster ride in 2024, ending with a dramatic 44% annual increase — their best performance since 2021. While natural gas prices have surged due to cold weather and rising liquefied natural gas (“LNG”) demand, the market remains volatile. Geopolitical tensions, shifting weather patterns, and supply-demand imbalances will define 2025. However, for investors, resilient players like Coterra Energy (CTRA) , Cheniere Energy (LNG) and Range Resources (RRC) offer a hedge against th ...

Following a robust performance in 2024, with the S&P 500 climbing almost 24%, investor sentiment became highly optimistic and even euphoric. This surge in enthusiasm led to stock prices becoming overinflated, resulting in overbought conditions. Consequently, a natural pullback occurred as the market took a step back to adjust and absorb the gains made earlier.Thus, the market will likely remain choppy, resulting in a need to focus on a portfolio of low-beta stocks, which may be a prudent approach to reducin ...

Here is a stock with buy rank and strong value characteristics for investors to consider today, January 3rd:Coterra Energy Inc. (CTRA) : This independent oil and gas company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its next year earnings increasing 16% over the last 60 days.Coterra has a price-to-earnings ratio (P/E) of 8.80, compared with 24.51 for the S&P 500. The company possesses a Value Score  of A. See the full list of top ranked stocks here. Learn more about the Val ...

Here are two stocks with buy rank and strong income characteristics for investors to consider today, January 3rd:Coterra Energy Inc. (CTRA) : This independent oil and gas company has witnessed the Zacks Consensus Estimate for its next year earnings increasing 16% over the last 60 days.This Zacks Rank #1 company has a dividend yield of 3.3%, compared with the industry average of 0.0%.RB Global, Inc. (RBA) : This omnichannel marketplace for commercial assets and vehicles has witnessed the Zacks Consensus Esti ...

Core Viewpoint - Coterra Energy Inc. (CTRA) is set to acquire Permian Basin assets from Franklin Mountain Energy and Avant Natural Resources for $3.95 billion, financed through a combination of cash and stock [1][2]. Acquisition Details - The acquisition will be completed via a cash and stock deal, consisting of $2.95 billion in cash and $1 billion in Coterra stock, with 40.9 million shares issued [1]. - The deal is expected to close by early 2025 and will enhance Coterra's portfolio with high-quality assets [2]. Post-Acquisition Benefits - CTRA will acquire 49,000 net acres, increasing its net locations in New Mexico by 75% and in the Permian by 25% [3]. - The acquisition is projected to boost oil production capacity by approximately 60,000 to 70,000 barrels of oil equivalent per day [3]. Production and Infrastructure - Following the acquisition, the pro forma production capacity is anticipated to reach around 160,000 barrels per day by 2025, with a reinvestment rate of about 50% [4]. - The addition of 125 miles of pipeline and other infrastructure will improve netbacks and operational economics [4]. Financial Outlook - The acquisition is expected to enhance cash flow and net asset value, with estimated oil production in 2025 projected to increase by 49% compared to 2024 [5]. - CTRA aims to maintain a strong balance sheet and high liquidity ratio by the end of 2025, planning to return at least 50% of free cash flow through dividends and buybacks [5]. Company Overview - Coterra Energy is an independent upstream operator involved in the exploration, development, and production of natural gas, crude oil, and natural gas liquids, currently holding a Zacks Rank 3 (Hold) [6].

Group 1 - Coterra Energy (NYSE: CTRA) exceeded production expectations in Q3 2024, with production levels above the high-end of its guidance [2] - The company has achieved faster cycle times, which have contributed to reduced well costs [2] - Capital expenditures (capex) for Coterra Energy have come in lower due to these efficiencies [2]

Core Viewpoint - Coterra Energy Inc. reported weaker-than-expected third-quarter 2024 earnings, primarily due to lower oil and natural gas prices and increased operating expenses compared to the previous year [1][2]. Financial Performance - Adjusted earnings per share for Q3 2024 were 30 cents, missing the Zacks Consensus Estimate of 35 cents and down from 47 cents in the same quarter last year [1]. - Operating revenues totaled $1.4 billion, falling short of the Zacks Consensus Estimate by $11 million but showing a slight increase of 0.2% year-over-year [2]. - Total shareholder returns for the quarter reached $265 million, comprising $154 million in declared dividends and $111 million in share repurchases [3]. Production and Pricing - Average daily production decreased by 0.2% year-over-year to 670.3 thousand barrels of oil equivalent (Mboe), exceeding the Zacks Consensus Estimate of 642 Mboe [5]. - Natural gas production fell by 7.6% to 2,682 million cubic feet (Mmcf) per day, while oil production increased by 22.2% to 112.2 thousand barrels (MBbl) per day [6]. - The average realized price for crude oil was $73.96 per barrel, an 8.5% decrease from $80.84 a year ago [6]. Costs and Expenses - Total operating expenses rose to $1,035 million, up from $939 million in the previous year, with average unit costs increasing to $16.96 per barrel of oil equivalent from $15.15 [8]. - Cash flow from operations decreased by 0.4% to $755 million, while cash capital expenditures for drilling and development amounted to $393 million [9]. Financial Position - As of September 30, 2024, Coterra Energy had $843 million in cash and cash equivalents and long-term debt of $2.1 billion, resulting in a debt-to-capitalization ratio of 13.7% [10]. Guidance - The company anticipates a capital expenditure budget between $1.75 billion and $1.85 billion for 2024, with expected discretionary cash flow of approximately $2.9 billion and free cash flow of about $1.1 billion [11]. - For Q4 2024, Coterra expects total equivalent production in the range of 660-690 Mboe per day and oil production between 107-108 MBopd [12].

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Coterra Energy Inc. as of September 30, 2024, including the balance sheet, statement of operations, cash flows, and stockholders' equity, along with detailed notes [Condensed Consolidated Balance Sheet](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Total assets decreased slightly to **$20,130 million** from **$20,420 million** at year-end 2023, primarily due to a decrease in current assets, while total liabilities also decreased to **$7,080 million** from **$7,370 million**, mainly from debt repayment Condensed Consolidated Balance Sheet (Unaudited) | (In millions) | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total current assets** | $1,735 | $2,015 | | **Properties and equipment, net** | $17,941 | $17,933 | | **Total Assets** | **$20,126** | **$20,415** | | **Total current liabilities** | $1,080 | $1,660 | | **Long-term debt** | $2,066 | $1,586 | | **Total Liabilities** | **$7,084** | **$7,368** | | **Total stockholders' equity** | **$13,034** | **$13,039** | [Condensed Consolidated Statement of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) For the third quarter of 2024, net income was **$252 million**, a decrease from **$323 million** in Q3 2023, and for the nine months ended September 30, 2024, net income was **$824 million**, down from **$1,210 million** in the same period of 2023, primarily due to lower natural gas revenue and higher operating expenses Statement of Operations Highlights (Unaudited) | (In millions, except per share) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $1,359 | $1,356 | $4,063 | $4,318 | | **Income from Operations** | $327 | $424 | $1,063 | $1,577 | | **Net Income** | **$252** | **$323** | **$824** | **$1,209** | | **Diluted EPS** | **$0.34** | **$0.42** | **$1.10** | **$1.58** | [Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash from operating activities decreased to **$2,170 million** from **$2,900 million** in the prior year period, mainly due to lower net income, while cash used in investing activities decreased to **$1,330 million**, and cash used in financing activities decreased to **$959 million** Statement of Cash Flows Highlights (Unaudited, Nine Months Ended Sep 30) | (In millions) | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $2,169 | $2,898 | | **Net cash used in investing activities** | $(1,327) | $(1,589) | | **Net cash used in financing activities** | $(959) | $(1,136) | | **Net (decrease) increase in cash** | $(117) | $173 | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on key financial items, including the issuance of **$500 million** in 5.60% senior notes, the amendment of the revolving credit agreement to **$2,000 million**, the repurchase of **15 million shares** for **$404 million**, and the maintenance of a **$0.21 per share** quarterly dividend - In March 2024, the Company issued **$500 million** of 5.60% senior notes due 2034[27](index=27&type=chunk) - In September 2024, the Company amended its revolving credit agreement, increasing aggregate commitments from **$1,500 million to $2,000 million** and extending the maturity to September 2029[23](index=23&type=chunk) - During the first nine months of 2024, the Company repurchased and retired **15 million shares for $404 million**. As of September 30, 2024, **$1,200 million** remained under the current share repurchase program[58](index=58&type=chunk) - The company increased its base quarterly dividend to **$0.21 per share** in February 2024. Total dividends paid in the first nine months of 2024 were **$474 million**[57](index=57&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a decrease in net income and operating cash flow for the first nine months of 2024 compared to 2023, primarily due to lower natural gas prices, and outlines the **$1,750-$1,850 million** 2024 capital program funded by operating cash flow [Financial and Operating Overview](index=20&type=section&id=Financial%20and%20Operating%20Overview) For the nine months ended September 30, 2024, net income fell to **$824 million** from **$1,200 million** year-over-year, and operating cash flow decreased to **$2,200 million** from **$2,900 million**, while equivalent production increased to **184.9 MMBoe** from **179.3 MMBoe**, despite a **35%** drop in average realized natural gas price Nine-Month Financial & Operating Comparison (2024 vs 2023) | Metric | Nine Months 2024 | Nine Months 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | $824 million | $1,209 million | -32% | | Diluted EPS | $1.11 | $1.59 | -30% | | Net Cash from Operations | $2.2 billion | $2.9 billion | -24% | | Equivalent Production (MMBoe) | 184.9 | 179.3 | +3% | | Avg. Realized Oil Price ($/Bbl) | $76.17 | $75.64 | +1% | | Avg. Realized Gas Price ($/Mcf) | $1.65 | $2.53 | -35% | [Market Conditions and Outlook](index=21&type=section&id=Market%20Conditions%20and%20Outlook) Natural gas prices have trended lower in 2024 compared to 2023 due to strong production and weak demand, leading Coterra to strategically curtail approximately **275 MMcf per day** of gross production in the Marcellus Shale, with the 2024 full-year capital program projected at **$1,750 million to $1,850 million** - Strategically curtailed an estimated **275 MMcf per day** of gross production in the Marcellus Shale during 2024 in response to weak natural gas prices[87](index=87&type=chunk) - The 2024 full-year capital program is projected to be approximately **$1,750 million to $1,850 million**, with about **64%** allocated to the Permian Basin[91](index=91&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$843 million** in cash and **$2,000 million** in unused commitments under its revolving credit facility as of September 30, 2024, with the debt-to-total capitalization ratio remaining stable at **14%** - As of September 30, 2024, the company had **$843 million** in cash and **$2,000 million** of unused commitments under its revolving credit agreement[96](index=96&type=chunk) Capitalization Summary | (In millions) | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total debt | $2,066 | $2,161 | | Stockholders' equity | $13,034 | $13,039 | | **Total capitalization** | **$15,100** | **$15,200** | | **Debt to total capitalization** | **14%** | **14%** | [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q3 2024 revenues were flat year-over-year at **$1,360 million**, as a **12%** increase in oil revenue was offset by a **33%** decrease in natural gas revenue, while for the first nine months, total revenues fell **6%** to **$4,060 million** due to a **31%** drop in average realized natural gas prices Q3 Production and Sales Price Comparison (2024 vs 2023) | Metric | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Oil Production (MMBbl) | 10.3 | 8.5 | +21% | | Natural Gas Production (Bcf) | 246.7 | 267.1 | -8% | | Avg. Oil Price ($/Bbl) | $74.04 | $80.80 | -8% | | Avg. Gas Price ($/Mcf) | $1.30 | $1.80 | -28% | Nine-Month Operating Expenses per BOE (2024 vs 2023) | Expense Category | 2024 ($/BOE) | 2023 ($/BOE) | | :--- | :--- | :--- | | Direct operations | $2.60 | $2.24 | | Gathering, processing & transport | $3.98 | $4.07 | | DD&A | $7.32 | $6.61 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is commodity price volatility for its oil, natural gas, and NGL production, which it mitigates using financial derivatives like collars and swaps, with outstanding hedges for production through Q1 2026 - The company's most significant market risk is the pricing of its oil, natural gas, and NGL production. It utilizes derivative instruments like collars and swaps to manage this risk[162](index=162&type=chunk)[163](index=163&type=chunk) Outstanding Natural Gas Hedges (as of Sep 30, 2024) | Period | Type | Volume (MMBtu) | Avg. Floor ($/MMBtu) | Avg. Ceiling ($/MMBtu) | | :--- | :--- | :--- | :--- | :--- | | Q4 2024 | Collars | 34,990,000 | $2.75 | $4.46 | | 2025 | Collars | 146,000,000 | $2.88 | $4.76 (avg) | | Q1 2026 | Collars | 27,000,000 | $2.75 | $7.66 | [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the third quarter of 2024 - The CEO and CFO concluded that the Company's disclosure controls and procedures are effective as of September 30, 2024[175](index=175&type=chunk) - No material changes in internal control over financial reporting occurred during the third quarter of 2024[176](index=176&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that a securities class action lawsuit was settled in principle, with a final order entered on October 29, 2024, and also received two Notices of Violation from the EPA in 2023 regarding alleged Clean Air Act violations, which are pending resolution - A securities class action lawsuit was settled, with the court entering a final order of dismissal with prejudice on October 29, 2024. Most of the settlement will be paid by insurance carriers[49](index=49&type=chunk) - The company received Notices of Violation from the EPA in June and August 2023 alleging Clean Air Act violations in Texas and New Mexico. The company is engaged in discussions with the EPA to resolve the allegations[180](index=180&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the company's Annual Report on Form 10-K, indicating no material changes to those previously disclosed risks - There have been no material changes to the risk factors previously disclosed in the company's Form 10-K[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of 2024, Coterra repurchased **4.275 million shares** of its common stock at an average price of approximately **$25.26 per share**, for a total cost of about **$108 million**, under the **$2,000 million** share repurchase program authorized in February 2023 Issuer Purchases of Equity Securities (Q3 2024) | Period | Total Shares Purchased (thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | July 2024 | 2,073 | $26.53 | | August 2024 | 1,597 | $24.11 | | September 2024 | 605 | $23.15 | | **Total** | **4,275** | **-** | [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the third quarter of 2024 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended September 30, 2024[184](index=184&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, debt agreements, and officer certifications as required by the Sarbanes-Oxley Act (Sections 302 and 906)