Coterra Energy Faces Mixed Market Performance Despite Positive Production Outlook
Houston-based Coterra Energy Inc. (CTRA) is making waves in the oil and gas sector. The independent company is deeply involved in the development, exploration, and production of oil, natural gas, and natural gas liquids, boasting a market cap of $20.8 billion. In addition to production activities, Coterra also manages natural gas and saltwater gathering and disposal systems across Texas.
Stock Performance: A Tough Year for Coterra
Over the last year, Coterra’s stock has struggled compared to the broader market. In the past 52 weeks, shares have risen by only 12.2%, falling short of the S&P 500 Index’s increase of 23.3%. Even more recently, CTRA has gained 10.5% over the past six months, while the S&P 500 has outperformed that gain with an 11.7% rise.
However, when compared to the Energy Select Sector SPDR Fund (XLE), which saw a 6.1% gain over the same span and a decline of 2.9% in the last six months, CTRA holds an advantage.
Q3 Earnings Report: Mixed Results
Coterra’s Q3 earnings, released on October 31, led to a significant drop in stock price, with shares falling 5.1% the following day. The company’s earnings per share (EPS) stood at $0.34, representing a 19% decline from the same quarter a year ago. This downturn can be linked to weaker oil and natural gas market conditions and a 10.2% rise in operating expenses, although revenue remained steady at approximately $1.4 billion year-over-year. On a positive note, Coterra raised its production guidance while reducing its capital expenses for the year, signaling improved capital efficiency.
Analysts’ Expectations and Ratings
Looking ahead, analysts predict that for the fiscal year ending in December, CTRA’s EPS will decline by 30.1% compared to last year, dropping to $1.53. The company’s record of meeting analyst expectations has been inconsistent, having beaten estimates in just one of the last four quarters.
Despite these challenges, Coterra holds a “Strong Buy” consensus rating among the 24 analysts covering the stock, with 19 “Strong Buy,” one “Moderate Buy,” and four “Hold” ratings.
Analyst Target Increases
On January 30, Barclays analyst Betty Jiang reaffirmed an “Overweight” rating on Coterra and raised the price target to $36, suggesting a 26.8% upside from current prices. The mean price target sits at $34.46, reflecting a potential upside of 21.4%. Moreover, the highest target of $41 hints at an impressive upside potential of 44.4%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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