As the fourth-quarter earnings season has commenced, major oil companies are yet to report their results. Given the stronger pricing environment, most energy players, including Permian Resources Corporation PR, are expected to deliver better-than-anticipated results. Midstream stocks such as Antero Midstream Corporation AM and TC Energy Corporation TRP are also drawing attention. By emphasizing high-return investments and enhancing production efficiency, oil and gas companies have positioned themselves for solid financial results in the fourth quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Stable Oil Prices Boost Q4 Performance
According to data from the U.S. Energy Information Administration, the average price of West Texas Intermediate crude stood at $71.99 per barrel in October, $69.95 per barrel in November and $70.12 per barrel in December. While these figures were lower than the respective months of the previous year, oil prices were stable and at healthy levels. This stability has had significant implications for various segments of the energy sector, particularly upstream, midstream and downstream operations.
The consistency in oil prices has provided a favorable environment for exploration and production (E&P) companies. Strong commodity prices supported increased drilling and production activities, which, in turn, bolstered revenue generation. Natural gas prices remained favorable, further reinforcing the profitability of the upstream sector in the fourth quarter.
Midstream companies have traditionally been less affected by fluctuations in oil and gas prices, as their business model relies on stable, fee-based revenues from pipeline and terminal operations. This trend is expected to have continued in the fourth quarter, ensuring steady cash flows for major midstream players.
How to Identify the Best Performing Stocks?
Given the backdrop and amid a large number of energy stocks, it is by no means an easy task for investors to arrive at picks that have the potential to deliver better-than-expected earnings.
While there is no fool-proof method of picking outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks that have high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Our Top Picks for Q4 Earnings
Permian Resources is an independent oil and natural gas company focusing on sustainable acquisition, optimization and development of high-return crude oil and natural gas reserves. It operates primarily in the core of the Permian Basin, covering West Texas and New Mexico, with approximately 407,000 net leasehold acres and 68,000 net royalty acres as of Dec. 31, 2023. About 70% of this acreage is in Texas and 30% is in New Mexico.
The company prioritizes leveraging its high-quality asset base and technical expertise to sustainably develop oil and gas resources. Its strategy includes optimizing asset development, driving disciplined production growth, maintaining a flexible balance sheet, generating sustainable free cash flow and enhancing shareholder returns.
Permian Resources currently has an Earnings ESP of +1.59% and a Zacks Rank #3. It is scheduled to release fourth-quarter earnings on Feb. 25, after the closing bell. Permian Resources beat the Zacks Consensus Estimate in the last four quarters, which resulted in an earnings surprise of 10.11%, on average.
Permian Resources Corporation Price and EPS Surprise
Permian Resources Corporation Price and EPS Surprise
TC Energy’s vast infrastructure network, encompassing 58,000 miles of pipelines and substantial natural gas storage capacity, serves as a key component of North America's energy system. The company’s core operations center around its extensive natural gas transmission network, which delivers approximately 25% of the continent’s consumption. This expansive midstream portfolio positions TRP for long-term growth, driven by rising demand for natural gas due to its cost efficiency, the ongoing transition to cleaner-burning fuels for power generation and North America’s abundant supply.
TC Energy currently has an Earnings ESP of +2.20% and a Zacks Rank #3. It is scheduled to release fourth-quarter earnings on Feb. 14, before the opening bell. The company beat the Zacks Consensus Estimate in the last four quarters, with an earnings surprise of 12.72%, on average.
TC Energy Corporation Price and EPS Surprise
TC Energy Corporation Price and EPS Surprise
TC Energy Corporation price-eps-surprise | TC Energy Corporation Quote
Antero Midstream derives stable, fee-based revenues through long-term contracts by delivering tailored and integrated midstream services to Antero Resources Corporation AR, a leading natural gas producer. Given that Antero Resources operates in the resource-rich Marcellus Shale within the Appalachian Basin, Antero Midstream is well-positioned to maintain consistent cash flow by supporting the upstream company's operations.
AM currently has an Earnings ESP of +10.62% and a Zacks Rank #3. Antero Midstream is scheduled to release fourth-quarter earnings on Feb. 12, after the closing bell. The company has witnessed upward revisions in earnings in the past 30 days.
Antero Midstream Corporation Price and EPS Surprise
Antero Midstream Corporation Price and EPS Surprise
Antero Midstream Corporation price-eps-surprise | Antero Midstream Corporation Quote
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