3 Momentum Energy Stocks to Focus on This Earnings Season

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]