Can These 4 Energy Stocks Beat Wall Street's Q4 Estimates?

Industry Overview - The energy sector is experiencing a challenging earnings season, with approximately 69.2% of S&P 500 energy companies having reported their fourth-quarter results, which have not been favorable due to declining oil and gas prices [1] - The average price of West Texas Intermediate crude oil fell to $70.69 per barrel in Q4 2024, down from$78.41 the previous year, attributed to increased global oil production and a slowdown in demand growth [2] - Natural gas prices also declined, with the Henry Hub spot price averaging $2.44 per million British thermal units (MMBtu), down from$2.74 per MMBtu in the same quarter last year [2] Earnings Performance - Energy companies in the S&P 500 are projected to report a 22.5% drop in earnings year-over-year for 2023, contrasting with an expected overall earnings growth of 13.4% for the S&P 500 index [3][4] - Revenue growth for energy companies has been modest at 2.1% year-over-year, while the overall S&P 500 index has seen a revenue increase of 5.5% [5] - Sectors such as technology and finance have reported significant earnings growth of 24.2% and 19.4%, respectively, highlighting the struggles of the energy sector [6] Market Sentiment - The decline in oil and gas prices is squeezing profit margins, leading investors to seek better returns in high-growth sectors like technology and finance, making it difficult for energy companies to attract investment [7] - There is uncertainty regarding a quick recovery in oil and gas prices, prompting investors to adjust their expectations for energy stocks in 2025 [7] Company-Specific Insights - APA Corporation (APA) is expected to report a 4.8% increase in revenues, reaching $2.3 billion, driven by a 31.3% rise in purchased oil and gas sales, despite a projected earnings decrease of 15.65% year-over-year [11] - Ovintiv Inc. (OVV) is anticipated to see a 52.77% decrease in earnings year-over-year, with an Earnings ESP of -1.03% and a Zacks Rank of 2, indicating low chances of an earnings beat [12][14] - Vista Oil & Gas (VIST) is projected to report a 64.29% decrease in earnings, with an Earnings ESP of 0.00% and a Zacks Rank of 3, suggesting low chances of an earnings beat [15] - Expand Energy Corporation (EXE) is expected to see a 59.54% decrease in earnings, with an Earnings ESP of -10.14% and a Zacks Rank of 2, indicating low chances of an earnings beat [17]