Key Takeaways Ranger Energy's business benefits from oil prices above $60 per barrel.Customers are prioritizing production activities, aligning with Ranger's service strengths.RNGR trades at a 3.19X EV/EBITDA, below the industry's 7.10X average, after a 10.9% stock gain.Per Oilprice.com data, the West Texas Intermediate (WTI) crude is currently trading at more than $60 per barrel mark. Since Ranger Energy Services Inc.’s (RNGR) overall business is positively correlated to oil prices, let’s analyze whether t ...

Core Viewpoint - ConocoPhillips (COP) is facing challenges due to expected declines in oil prices, with the U.S. Energy Information Administration (EIA) projecting an average price of $64.16 per barrel for West Texas Intermediate crude this year, down from $76.60 per barrel last year [1][6]. Group 1: Oil Price Impact - The EIA forecasts that rising worldwide oil inventory will negatively impact commodity prices, which is unfavorable for exploration and production activities, including those of ConocoPhillips [1]. - Despite the anticipated lower oil prices, ConocoPhillips operates in regions with low breakeven costs, such as the Permian Basin, which may allow the company to remain profitable [2]. Group 2: Competitive Landscape - Other major players like Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX) also have significant operations in the Permian Basin, and their low breakeven costs may help them navigate the weaker pricing environment [3]. Group 3: Stock Performance and Valuation - Over the past year, ConocoPhillips shares have declined by 12.8%, which is less severe than the 17.2% decline of the broader industry composite [4]. - The company's trailing 12-month enterprise value to EBITDA (EV/EBITDA) ratio stands at 5.20X, significantly lower than the industry average of 10.87X, indicating potential undervaluation [7]. - Recent downward revisions in the Zacks Consensus Estimate for COP's 2025 earnings suggest a cautious outlook [9].

Core Insights - Exxon Mobil Corporation (XOM) anticipates a decline in earnings for Q2 2025 due to lower oil and natural gas prices, which is a significant concern given the company's reliance on exploration and production activities [1][3] Price Trends - The average spot prices for West Texas Intermediate (WTI) crude were $63.54, $62.17, and $68.17 per barrel for April, May, and June respectively, indicating a decline from Q1 prices which averaged $75.74, $71.53, and $68.24 per barrel [2] - Natural gas prices have also shown a similar downward trend, impacting the overall pricing environment for the energy sector [2] Earnings Impact - XOM forecasts that lower oil prices will reduce its upstream earnings by $800 million to $1.2 billion, while changes in gas prices could decrease upstream profit by $300 million to $700 million, leading to an expected earnings per share (EPS) of $1.47 for Q2, a decline of nearly 31% year over year [3][7] - The Zacks Consensus Estimate for EOG Resources, Inc. (EOG) is $2.13 per share for Q2, reflecting a 33% year-over-year decline, while ConocoPhillips (COP) is estimated at $1.44 per share, indicating a 27.3% decline [5] Stock Performance and Valuation - XOM shares have increased by 3.7% over the past year, contrasting with a slight decline of 0.6% in the broader industry [6] - XOM's current trailing 12-month enterprise value to EBITDA (EV/EBITDA) ratio stands at 6.89X, which is above the industry average of 4.16X [8] Earnings Estimates Revision - The Zacks Consensus Estimate for XOM's earnings for 2025 has been revised upward in the past week, with current estimates for Q2 at $1.47, next quarter at $1.48, and the current year at $6.33 [10][11]

Core Insights - Exxon Mobil Corporation (XOM) is significantly impacted by declining oil prices, particularly in its upstream business, which is closely tied to the price of West Texas Intermediate (WTI) crude oil [1][3][8] - The U.S. Energy Information Administration (EIA) projects a decrease in WTI prices, with an average of $62.33 per barrel in 2025, down from $76.60 per barrel last year, and further declining to $55.58 per barrel in 2026 [2] Group 1: Company Performance - XOM's upstream earnings are under pressure due to a more than 7% drop in WTI crude prices this year, but its low-cost operations in the Permian Basin help mitigate outright losses [3][8] - XOM's shares have gained only 1.6% year to date, slightly outperforming the industry average of 0.9% [7] - The current enterprise value to EBITDA (EV/EBITDA) ratio for XOM is 6.65X, which is higher than the industry average of 4.15X [9] Group 2: Earnings Estimates - The Zacks Consensus Estimate for XOM's 2025 earnings has remained unchanged over the past week, with estimates at $6.11 per share [10][11] - Historical earnings estimates for XOM have shown a downward trend over the past 90 days, with previous estimates for 2025 being as high as $7.41 per share [11] Group 3: Industry Context - Other major players in the industry, such as Chevron Corporation (CVX) and BP plc (BP), are also experiencing challenges due to lower oil prices, as they generate significant earnings from upstream operations [4][6] - Both CVX and BP have low breakeven costs in the Permian Basin, which helps them navigate the current pricing environment [5][6]

Group 1: Oil Market Overview - Oil prices have been volatile, influenced by geopolitical tensions and bearish crude data from the U.S. West Texas Intermediate (WTI) crude is down 0.7% at $61.62, contributing to a 14.3% year-to-date deficit [1] - The market is reacting to reports of Israel preparing to strike Iran, which has added to the volatility [1] Group 2: Company Performance - EQT Corp (NYSE:EQT) reached an 11-year high of $57.37, currently down 0.3% at $55.96, with a year-over-year increase of 35.7% and a year-to-date increase of 21.5% [2] - TotalEnergies SE (NYSE:TTE) is down 0.3% at $59.21, facing resistance at the $60 level and its 160-day moving average, but is still up 8.7% year-to-date [3] - Diamondback Energy Inc (NASDAQ:FANG) hit a two-year low of $114.00, currently down 0.8% at $137.22, and has decreased 16.2% year-to-date [4]

Core Viewpoint - ConocoPhillips (COP) is expected to report first-quarter 2025 results on May 8, with earnings estimated at $1.99 per share, reflecting a 2% decline year-over-year, while revenues are projected to increase by 13.1% to $16.4 billion [1][6]. Earnings Performance - COP has outperformed earnings estimates in three of the last four quarters, with an average surprise of 2.1% [3]. - The company has a positive Earnings ESP of 0.83% and a Zacks Rank of 3 (Hold), indicating a potential earnings beat [4]. Production and Pricing Factors - Average spot prices for WTI crude were $75.74, $71.53, and $68.24 per barrel in January, February, and March respectively, which likely supported COP's exploration and production activities [6]. - Total daily oil equivalent production volumes are forecasted to increase by 23% year-over-year, with a significant 33.2% rise expected in the Lower 48 region [7]. Stock Performance and Valuation - COP's stock has decreased by 27% over the past year, slightly better than the industry's 28% decline [8]. - The current trailing 12-month EV/EBITDA ratio for COP is 5.24, indicating it is undervalued compared to the industry average of 10.76 [9]. Strategic Moves - The acquisition of Marathon Oil has expanded COP's Lower 48 portfolio, adding over 2 billion barrels of resources and is expected to yield annual savings exceeding $1 billion within the next 12 months [12][15]. - The company's focus on exploration and production makes it more susceptible to oil price volatility compared to diversified majors like ExxonMobil and Chevron [15]. Industry Comparison - ExxonMobil reported first-quarter 2025 earnings of $1.76 per share, beating estimates but declining from $2.06 year-over-year, with revenues of $83.13 billion missing estimates [17][18]. - Chevron's adjusted earnings per share were $2.18, surpassing estimates but down from $2.93 year-over-year, with revenues of $47.6 billion also missing expectations [19][20].