We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you accept our Privacy Policy and Terms of Service, revised from time to time, and you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Want to Play Upstream Energy Stock? Consider Concho Resources
Read MoreHide Full Article
Concho Resources Inc. has been gaining traction from its huge acreage position in the Permian Basin. Its better-than-expected results for the second quarter of 2020 buoy investors’ optimism. Despite the existing market uncertainties, the stock has gained 6% in the past six months.
Based in Midland, TX, Concho Resources is an independent oil and gas explorer and producer. Founded in 2004, the company focuses on growth through a combination of acquisitions and active drilling activity in the lucrative Permian Basin spread across West Texas and New Mexico. Notably, it is one of the largest producers in the prolific Permian Basin.
Currently, Concho Resources has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) offer the best investment opportunities. You can see the complete list of today's Zacks #1 Rank stocks here.
Northbound Estimates
Earnings estimate revisions have the greatest impact on stock prices. Concho Resources witnessed seven upward and three downward revisions by the analysts in the past 60 days. The Zacks Consensus Estimate for 2020 bottom line is pegged at a 34.4% rise, indicating improvement from the year-ago quarter’s reported figure.
Positive Earnings Surprise History
Earnings of Concho Resources outpaced the Zacks Consensus Estimate in two of the trailing four quarters while the same met and missed the mark once each. The company delivered an earnings surprise of 67.2%, on average.
Concho Resources is known for its strategic acreage position in the low-cost Permian Basin. Covering 800,000 gross (550,000 net) acres, its assets are spread over high-quality land across the core Delaware and Midland Basins. Moreover, the buyout of RSP Permian bolstered the company's presence in the region, thereby lifting its output prospects. Precisely, the oil production is estimated to remain unchanged in 2020 despite lowering capital budget by 40%.
Cost Reduction
The company’s cost management and cash-saving efforts have been encouraging. For 2020, Concho Resources trimmed 40% of its capital expenditure to $1.6 billion from its original guidance of $2.7 billion after reckoning the ongoing crash in commodity prices. Moreover, for the current year, Concho projects its controllable costs to stay below $8.50 per Boe. This, in turn, is expected to boost the company’s earnings and cash flows.
Balance Sheet Strength
Concho Resources' total long-term debt is currently around $4 billion with $320 million as cash & cash equivalents. Its total debt-to- total capital of 33.3% is below the industry average of 37.9%. Moreover, the company has $2 billion under its unused credit facility, which will solidify its liquidity position and enable it to navigate through the current market turbulence. Notably, Concho Resources has no debt maturities until 2027. Therefore, the company seems in a decent financial position to overcome the prevalent crisis.
Other Stocks to Consider
Some other top-ranked players in the energy space are Cimarex Energy Co. , EOG Resources, Inc. (EOG - Free Report) and Royal Dutch Shell plc , each holding the same Zacks Rank as Concho Resources at present.
Cimarex Energy’s sales for 2021 are expected to rise 11% year over year.
EOG Resources’ sales for 2021 are expected to increase 18.8% year over year.
Shell’s bottom line for 2021 is expected to skyrocket 113.5% year over year.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Want to Play Upstream Energy Stock? Consider Concho Resources
Concho Resources Inc. has been gaining traction from its huge acreage position in the Permian Basin. Its better-than-expected results for the second quarter of 2020 buoy investors’ optimism. Despite the existing market uncertainties, the stock has gained 6% in the past six months.
Based in Midland, TX, Concho Resources is an independent oil and gas explorer and producer. Founded in 2004, the company focuses on growth through a combination of acquisitions and active drilling activity in the lucrative Permian Basin spread across West Texas and New Mexico. Notably, it is one of the largest producers in the prolific Permian Basin.
Currently, Concho Resources has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) offer the best investment opportunities. You can see the complete list of today's Zacks #1 Rank stocks here.
Northbound Estimates
Earnings estimate revisions have the greatest impact on stock prices. Concho Resources witnessed seven upward and three downward revisions by the analysts in the past 60 days. The Zacks Consensus Estimate for 2020 bottom line is pegged at a 34.4% rise, indicating improvement from the year-ago quarter’s reported figure.
Positive Earnings Surprise History
Earnings of Concho Resources outpaced the Zacks Consensus Estimate in two of the trailing four quarters while the same met and missed the mark once each. The company delivered an earnings surprise of 67.2%, on average.
Concho Resources Inc. Price and EPS Surprise
Concho Resources Inc. price-eps-surprise | Concho Resources Inc. Quote
High-Quality Acreages
Concho Resources is known for its strategic acreage position in the low-cost Permian Basin. Covering 800,000 gross (550,000 net) acres, its assets are spread over high-quality land across the core Delaware and Midland Basins. Moreover, the buyout of RSP Permian bolstered the company's presence in the region, thereby lifting its output prospects. Precisely, the oil production is estimated to remain unchanged in 2020 despite lowering capital budget by 40%.
Cost Reduction
The company’s cost management and cash-saving efforts have been encouraging. For 2020, Concho Resources trimmed 40% of its capital expenditure to $1.6 billion from its original guidance of $2.7 billion after reckoning the ongoing crash in commodity prices. Moreover, for the current year, Concho projects its controllable costs to stay below $8.50 per Boe. This, in turn, is expected to boost the company’s earnings and cash flows.
Balance Sheet Strength
Concho Resources' total long-term debt is currently around $4 billion with $320 million as cash & cash equivalents. Its total debt-to- total capital of 33.3% is below the industry average of 37.9%. Moreover, the company has $2 billion under its unused credit facility, which will solidify its liquidity position and enable it to navigate through the current market turbulence. Notably, Concho Resources has no debt maturities until 2027. Therefore, the company seems in a decent financial position to overcome the prevalent crisis.
Other Stocks to Consider
Some other top-ranked players in the energy space are Cimarex Energy Co. , EOG Resources, Inc. (EOG - Free Report) and Royal Dutch Shell plc , each holding the same Zacks Rank as Concho Resources at present.
Cimarex Energy’s sales for 2021 are expected to rise 11% year over year.
EOG Resources’ sales for 2021 are expected to increase 18.8% year over year.
Shell’s bottom line for 2021 is expected to skyrocket 113.5% year over year.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>