Chicago, IL –November 27, 2024 – Zacks Equity Research shares Dave DAVE, as the Bull of the Day and Boeing BA as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Baker Hughes Co. BKR, EOG Resources Inc. EOG and Matador Resources Co. MTDR.
Dave is in the Technology Services industry which ranks in the Top 26% of our Zacks Industry Rank. The reason for the favorable Zacks Rank is that several analysts on Wall Street have increased their earnings estimates for the company. Over the last month, analysts have upped the ante on both this year and next year. The bullish moves have pushed up our Zacks Consensus Estimates for the current year from $2.33 to $3.33 while next year’s move is up from $3.39 to $4.36.
That means that current year EPS growth is forecast to come in at 181% over last year, while next year’s number is set to swell another 31%. That’s on revenue growth of 31% this year and 19% next year. That puts DAVE at a forward PE of 25.6x, nearly in-line with the broad market’s 24.95x.
Boeing is a leading American multinational corporation in the aerospace and defense sectors. The company designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, and missiles worldwide, and provides leasing and product support services.
It seems like every time Boeing starts to pick up altitude, it gets hit with more turbulence. The aerospace giant has been dogged by supply chain disruptions, causing delays in production. And it’s not just about the materials—skilled labor shortages continue to plague the industry, leaving Boeing struggling to meet delivery timelines.
In the post-COVID world, supply chain issues have become a tired excuse, but investors demand results. Boeing’s inability to iron out these problems raises questions about management’s effectiveness in navigating a tricky macroeconomic environment.
Over-promise and under-deliver has become the mantra at Boeing recently. A quick look at the Price, Consensus and Surprise Chart outlines this. Earnings estimates seem to start sky high every year then spend the rest of the year being walked back.
That’s a big reason why the stock is currently a Zacks Rank #5 (Strong Sell). Over the last sixty days, no fewer than eight analysts on Wall Street have cut their earnings estimates for the company. The negative moves have dropped our Zacks Consensus Estimate for the current year from a loss of $4.23 to a loss of $16.20. Next year’s number has been cut from a profit of $3.32 to a meager 6-cents
A feather in the bull’s cap here, revenue growth is forecast to return in grand fashion next year. After contracting 10.5% for FY24, Wall Street is now expecting 23% growth next year to $85.9 billion.
The Aerospace – Defense industry is currently in the Bottom 46% of our Zacks Industry Rank. There are a handful of names in the industry which are in the good graces of our Zacks Rank.
In its last weekly release, Baker Hughes Co. stated that the U.S. rig count was lower than the prior week’s figure. The rotary rig count, issued by BKR, is usually published in major newspapers and trade publications.
Baker Hughes’ data, issued at the end of every week since 1944, helps energy service providers gauge the overall business environment of the oil and gas industry. The number of active rigs and its comparison with the week-ago figure indicates the demand trajectory for the company’s oilfield services from exploration and production companies.
With the weekly rig count declining, should investors consider monitoring prominent oil and gas exploration companies such as EOG Resources Inc. and Matador Resources Co.? Before delving into this, let’s first examine the latest rig count data.
Total U.S. Rig Count Falls: The number of rigs engaged in the exploration and production of oil and natural gas in the United States was 583 in the week ended Nov. 22, lower than the week-ago count of 584. Also, the current national rig count declined from the year-ago level of 622, reflecting the fact that there has been a slowdown in drilling activities.
Some analysts see this downside as a sign of increased efficiency among shale producers, who may need fewer rigs. However, there are doubts among a few about whether certain producers have sufficient promising land for drilling.
Onshore rigs in the week that ended on Nov. 22 totaled 568, in line with the prior-week count. In offshore resources, 13 rigs were operating, lower than the week-ago count of 14.
U.S. Oil Rig Count Rises: The oil rig count was 479 in the week ended Nov. 22, higher than the week-ago figure of 478. The current number of oil rigs — far from the peak of 1,609 attained in October 2014 — was, however, down from the year-ago figure of 500.
U.S. Natural Gas Rig Count Falls: The natural gas rig count of 99 was lower than the week-ago figure of 101. The count of rigs exploring the commodity was also below the year-ago week’s tally of 117. Per the latest report, the number of natural gas-directed rigs is almost 94% lower than the all-time high of 1,606 recorded in 2008.
Rig Count by Type: The number of vertical drilling rigs totaled 16 units, in line with the week-ago count. However, the horizontal/directional rig count (encompassing new drilling technology with the ability to drill and extract gas from dense rock formations, also known as shale formations) of 567 was lower than the prior-week level of 568.
Permian — the most prolific basin in the United States — recorded a weekly oil and gas rig count of 303, in line with the week-ago figure. The count was, however, below the prior-year level of 311.
West Texas Intermediate (WTI) crude is steadily nearing the $70-per-barrel threshold, creating a favorable environment for exploration and production activities. Although drilling activity has tempered as upstream companies focus on maximizing stockholder returns rather than expanding production, the supportive pricing landscape remains advantageous for energy producers.
U.S. oil and gas companies benefit from substantially lower breakeven WTI prices across all shale plays, especially for existing wells. Moreover, the average breakeven price for most new wells stays below prevailing market levels, enabling upstream operators to sustain profitability in the current market conditions.
Amid the backdrop, investors seeking medium to long-term gains may keep an eye on energy stocks like EOG Resources and Matador Resources.
In the United States, EOG Resources is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The company, carrying a Zacks Rank #3 (Hold), possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong business outlook.
Matador's focus on record production and cost-saving techniques is driving higher profitability per barrel and reducing overall expenses, creating a solid foundation for sustained long-term growth. The recent acquisition of Ameredev assets and their rapid, successful integration — resulting in additional production and lower costs — highlights Matador's operational efficiency.
Furthermore, proceeds from the sale of Piñon Midstream are expected to strengthen the financial flexibility of MTDR, which carries a Zacks Rank #3, by reducing leverage ratios. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The Boeing Company (BA) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
Dave Inc. (DAVE) : Free Stock Analysis Report
Baker Hughes Company (BKR) : Free Stock Analysis Report
Matador Resources Company (MTDR) : Free Stock Analysis Report
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