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Paycom Software, Benefitfocus, Devon Energy, Matador Resources and Chevron highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 1, 2021 – Zacks Equity Research Shares of Paycom Software, Inc. (PAYC - Free Report) as the Bull of the Day, Benefitfocus, Inc. as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Devon Energy Corporation (DVN - Free Report) , Matador Resources Company (MTDR - Free Report) and Chevron Corporation (CVX - Free Report) .
Paycom Software is a $30 billion provider of integrated HR services for corporations. Shares busted out to new highs above $400 last month after another stellar earnings report and closed above $500 for the first time on Thursday.
Founded in 1998, the company offers analytics that manage the complete employment life cycle from recruitment to retirement with cloud-based human capital management (HCM) SaaS solutions for employee records, payroll, and talent management processes.
Oklahoma City-based Paycom serves more than 23,500 clients in all 50 states, or nearly 12,700 customers based on Parent Company Grouping. Its human resource services include retirement services administration, workers’ compensation administration, employee benefit solutions, professional employer organization and other administrative services for businesses.
Paycom’s HCM solution offers a full suite of applications that generally falls within the following categories: talent acquisition, time and labor management, payroll, talent management and HR management.
Its HCM software streamlines and automates many of the day-to-day record-keeping processes and provides a framework for HR staff to manage benefits administration and payroll, map out succession planning and document such things as personnel actions and compliance with industry and/or government regulations.
Ideally, the cloud-based HCM reduces the administrative burden on employers and increases employee productivity and retention.
Another Great Quarter of Growth
Paycom reported second-quarter 2021 results on August 3, with adjusted earnings of 97 cents per share beating the Zacks Consensus Estimate by 16.9% and jumping 56.5% year over year.
The company generated revenues of $242.1 million, which increased 33.3% from the year-earlier period and surpassed the consensus mark of $232.2 million by over 4%. This year-over-year upswing was mainly driven by new client additions and continued focus on cross selling to existing clients.
Adjusted gross profit climbed 34.5% from the year-ago period to $206.9 million. Moreover, adjusted gross margin expanded 70 basis points (bps) on a year-on-year basis to 85.4%.
Paycom Software's adjusted EBITDA increased 42.2% year on year to $87 million. Further, adjusted EBITDA margin advanced 220 bps to 35.9%.
Revenue guidance for the year was bumped up to a range $1.036-$1.038 billion, vs the consensus of $1.02B. Yes, the stock is richly-priced at 29 times sales, like a lot of SaaS companies with 30% growth.
And PAYC is actually being given a higher relative valuation since its topline growth is only 23-24% this year and next. I'll conjecture why this might be coming up. First, let's see those price target bumps!
Analyst Reactions: Let's Go to $500
While most analyst price targets were above $400 before this report -- and tend to be 12-month projections on growth and valuation -- clearly investors loved the company's growth outlook enough to take shares there right away. Here were some bullish analysts looking for upside after the conference call, and before shares leaped up to $440 the next day...
Oppenheimer analyst Brian Schwartz raised his price target on Paycom to $500 from $475 and kept an Outperform rating on the shares. He noted the company reported a robust Q2 which exceeded expectations across key metrics and produced an impressive recurring revenue beat "despite a tight labor market."
"Paycom continues driving strong growth via its leading technology and self-service vision, best-in-class sales engine, and because COVID has accelerated the demand for digital self-service payroll technologies," Schwartz surmised.
Jefferies analyst Samad Samana raised the firm's price target on Paycom to $500 from $470 and kept a Buy rating on the shares after the company's Q2 total revenue, recurring revenue and EBITDA beat consensus forecasts and its Q3 and FY21 guidance came in above expectations as well. Samana believes "investors will reward the return to greater than 30% growth."
FinTech... from HR and Payroll?
Currently at the top of Paycom's corporate website, they show a handset with all kinds of employee benefit functions to access at the scroll and tap of one's fingers.
The caption reads "Tomorrow's Technology. Today. Comprehensive HR and Payroll Software."
And when you scroll down, you come across this claim about employee-managed data: "Your employees can access their info through easy-to-use tech, 24/7."
This includes requesting time off, seeing compensation, expenses, documents, and even performance.
This may be one reason that Paycom has such a rich valuation as they help corporations merge into the FinTech universe that their employees-as-consumers are now accustomed to with apps and access at their fingertips.
It certainly makes sense since we can access everything else in our financial lives this way.
Bigger competitor Workday, which is approaching $6 billion in revenues next year -- and was born of the PeopleSoft pioneers -- only trades at 12X sales growing 18%. They don't appear to claim prowess with a digital app for employee engagement with their data.
Interestingly enough, one of the oldest pioneers in the HR space is Paychex with expertise serving companies of less than 1,000 employees. Paychex launched in 1971 and went public in 1983, and I'm sure many Boomers and GenX-ers saw that mark on their paystub.
I recently saw CEO Martin Mucci on CNBC's TechCheck to discuss his company's "50 years of FinTech," and how the company stays relevant and competitive in the digital app world. You gotta love him for essentially staking claim to the ground of "we were doing fintech before you were born!"
By the way, PAYX trades under 10X sales -- approaching $4.5 billion -- while it grows in modest single digits. I would not ignore them because the right partner could take their access to America's small businesses -- employers and employees -- and explode the FinTech app opportunities.
Speaking of the broader FinTech arena, I did a little thing this week on all the innovations flooding into the market from hundreds of small startups that are putting traditional banks and financial transaction companies on notice about their dying tenure...
And now that I think of it, the investor love for Paycom that is pushing it over $500 and nearly 30X sales may be due to one very smart and financially savvy woman: Barbara Corcoran.
I just recalled that the Shark Tank investor does commercials for them. God bless her if she got a few tens of thousands of shares at 2019 prices under $200.
What I didn't have time or room here to address is what these so-called HCM firms are doing with employee education and training that helps workers advance their careers whether they stay or go.
And then there's "financial literacy" where some companies go beyond just giving a 401k with a match to teaching their employees how to organize and manage their entire financial lives. I'll be doing more homework and content in this area soon.
So be sure to check out the article and video linked above and then click + Follow up above to be certain you are notified when I do more research on the exploding disruptive innovation in the FinTech arena.
Benefitfocus is a $400 million provider of cloud-based software solutions to consumers, employers, insurance carriers and brokers. The company's platform of products and services enable customers to efficiently shop, enroll, manage and exchange benefits information.
I chose BNFT for the Bear of the Day for a couple of reasons -- besides the first criteria of being a Zacks #5 Rank due to falling earnings estimates.
First, I was an investor in BNFT shares in 2019 around $25 as I sought more software exposure in my Healthcare Innovators portfolio. I also saw the company as a potential M&A target, with a market valuation near $1 billion, for the likes of Workday or Paycom Software.
At the time of my investment, I noted that more than 23 million insured individuals and their dependents were managed on the platform.
Based in Charleston, South Carolina, the company was growing revenue in the high teens to over $350 million.
But I had to let it go below $20 in 2020 as the idea just wasn't working, and sales and EPS numbers just kept getting revised downward.
Coming out of the pandemic, shares got above $16 but have since slid again as each subsequent earnings report offers little for bulls to feed on.
Revenues have flat-lined just above $255 million and this year's consensus EPS of -0.41 cents represents an annual loss of 28%.
So the other reason I wanted to talk about the demise of BNFT is that it stands out as the proverbial black sheep among HR and benefit management companies who are growing strongly and their stocks making new highs.
See my Bull of the Day on Paycom for more on the success of several juggernauts in HR and Human Capital Management software systems.
In that piece, I also talk about the innovations of companies like Paycom into "fintech" arenas with progressive apps and data access for employees.
When you look at all the innovation happening across fintech, it appears there are many crossover applications to the communication between companies and their workers.
I expand on the universe of fintech disruption further in this week's edition of Cook's Kitchen...
In that article and video, you'll get a good idea of the size of the revolutions occurring for over 20 different financially-connected industries and their customers -- which could represent another hundred industries.
While I wanted to see Benefitfocus succeed, and I still do, I'm glad I had the risk management sense to cut my losses long ago. Especially since there are hundreds of other new opportunities coming down the fintech river.
Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the Healthcare Innovators portfolio and recently bagged 90% gains in CRISPR stock Intellia Therapeutics (NTLA) this year.
Additional content:
Bet on 3 Permian Basin Stocks on Rising U.S. Shale Production
Production in U.S. shale plays continues to rise as oil price has recovered massively from the coronavirus pandemic-hit low mark in 2020. It seems that the glorious days for upstream energy players are gradually approaching, thanks to recovering fuel demand as coronavirus vaccines are rolling out at a massive scale.
EIA Expects US Shale Oil Production to Increase
In September, total production of oil from shale resources in the United States will likely increase by 49,000 barrels per day to 8.1 million barrels per day (MMBbl/D) – the highest since April 2020 – per the U.S. Energy Information Administration (EIA). The shale resources comprise Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian.
Of all the resources, Permian – the most prolific basin in the United States – will witness the highest increase in daily oil production this month, offsetting the volume declines in Eagle Ford, Bakken and Anadarko, according to EIA’s drilling productivity report. In the Permian, EIA projects oil production to rise by 49,000 barrels per day to 4.8 MMBbls/D in September, suggesting the highest level since March 2020.
Permian Explorers in the Spotlight
The increasing production in Permian is being backed by higher drilling activities. In its weekly release, Baker Hughes reported that from 179 oil rigs in the Permian for the week ended Jan 8, 2021, the tally has increased massively to 248 for the week ended Aug 27, 2021.
Recovery in oil price has been providing incentives to explorers and producers to gradually return to the shale play. With West Texas Intermediate crude price approaching the $70-per-barrel mark, oil price has recovered considerably from the pandemic-hit April last year, when the commodity was in the negative territory.
Thus, improving production in the Permian amid a favorable crude pricing environment has raised the incentive for adding stocks of companies operating in the most prolific basin.
3 Stocks to Buy
Since selecting the right companies, with a footprint in the Permian, from the stock universe is not an easy job, we are employing our proprietary Stock Screener to zero down on three prospective stocks. Two of the stocks sport a Zacks Rank #1 (Strong Buy), while one carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Devon Energy has a strong footprint in the Delaware Basin – a sub-basin of the broader Permian. The upstream player’s position in the sub-basin spans around 400,000 net acres across multiple formations. From the resources, the company is expecting high-margin growth, backed by excellent productivity. Of the total upstream budget for 2021, Devon has planned to allocate 80% capital toward the Delaware Basin.
So far this year, the #1 Ranked company has gained 78.7% and is well placed to gain further. Backed by strong results in the June quarter, the leading upstream energy player has declared a fixed-plus-variable dividend of 49 cents per share, reflecting an increase of 44% from the prior quarter.
Headquartered in Dallas, TX, Matador Resources has a strong footprint in the liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The Zacks #1 Ranked company has been ramping up production in the basin and has produced record daily barrels of oil equivalent volumes from Delaware in the recently concluded June quarter. By this year’s end, the company is expecting to have 34 gross operated wells in progress in the Delaware basin.
Shares of this leading upstream energy player have gained 136.4% so far this year, backed by investors’ excitement about strong second-quarter results. In the June quarter, the company’s average daily oil equivalent total production rose 26% sequentially, beating the guidance for an increment of 19 to 22%.
In the Permian basin, Chevron is among the largest oil and gas producers. From the Delaware and Midland sub-basins, the company is expecting to produce higher daily oil equivalent barrels in 2021 as compared to 2019. From operations in the prolific sub-basins, backed by continued efficiency improvements, the energy giant expects to generate more than $3 billion in free cashflow (excluding working capital) in 2021.
So far this year, the Zacks Rank of 2 company has gained 13.4%, backed by the news that it revived its stock repurchase program and vowed to buy back $2-$3 billion in shares annually, starting from the third quarter.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Paycom Software, Benefitfocus, Devon Energy, Matador Resources and Chevron highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 1, 2021 – Zacks Equity Research Shares of Paycom Software, Inc. (PAYC - Free Report) as the Bull of the Day, Benefitfocus, Inc. as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Devon Energy Corporation (DVN - Free Report) , Matador Resources Company (MTDR - Free Report) and Chevron Corporation (CVX - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Paycom Software is a $30 billion provider of integrated HR services for corporations. Shares busted out to new highs above $400 last month after another stellar earnings report and closed above $500 for the first time on Thursday.
Founded in 1998, the company offers analytics that manage the complete employment life cycle from recruitment to retirement with cloud-based human capital management (HCM) SaaS solutions for employee records, payroll, and talent management processes.
Oklahoma City-based Paycom serves more than 23,500 clients in all 50 states, or nearly 12,700 customers based on Parent Company Grouping. Its human resource services include retirement services administration, workers’ compensation administration, employee benefit solutions, professional employer organization and other administrative services for businesses.
Paycom’s HCM solution offers a full suite of applications that generally falls within the following categories: talent acquisition, time and labor management, payroll, talent management and HR management.
Its HCM software streamlines and automates many of the day-to-day record-keeping processes and provides a framework for HR staff to manage benefits administration and payroll, map out succession planning and document such things as personnel actions and compliance with industry and/or government regulations.
Ideally, the cloud-based HCM reduces the administrative burden on employers and increases employee productivity and retention.
Another Great Quarter of Growth
Paycom reported second-quarter 2021 results on August 3, with adjusted earnings of 97 cents per share beating the Zacks Consensus Estimate by 16.9% and jumping 56.5% year over year.
The company generated revenues of $242.1 million, which increased 33.3% from the year-earlier period and surpassed the consensus mark of $232.2 million by over 4%. This year-over-year upswing was mainly driven by new client additions and continued focus on cross selling to existing clients.
Adjusted gross profit climbed 34.5% from the year-ago period to $206.9 million. Moreover, adjusted gross margin expanded 70 basis points (bps) on a year-on-year basis to 85.4%.
Paycom Software's adjusted EBITDA increased 42.2% year on year to $87 million. Further, adjusted EBITDA margin advanced 220 bps to 35.9%.
Revenue guidance for the year was bumped up to a range $1.036-$1.038 billion, vs the consensus of $1.02B. Yes, the stock is richly-priced at 29 times sales, like a lot of SaaS companies with 30% growth.
And PAYC is actually being given a higher relative valuation since its topline growth is only 23-24% this year and next. I'll conjecture why this might be coming up. First, let's see those price target bumps!
Analyst Reactions: Let's Go to $500
While most analyst price targets were above $400 before this report -- and tend to be 12-month projections on growth and valuation -- clearly investors loved the company's growth outlook enough to take shares there right away. Here were some bullish analysts looking for upside after the conference call, and before shares leaped up to $440 the next day...
Oppenheimer analyst Brian Schwartz raised his price target on Paycom to $500 from $475 and kept an Outperform rating on the shares. He noted the company reported a robust Q2 which exceeded expectations across key metrics and produced an impressive recurring revenue beat "despite a tight labor market."
"Paycom continues driving strong growth via its leading technology and self-service vision, best-in-class sales engine, and because COVID has accelerated the demand for digital self-service payroll technologies," Schwartz surmised.
Jefferies analyst Samad Samana raised the firm's price target on Paycom to $500 from $470 and kept a Buy rating on the shares after the company's Q2 total revenue, recurring revenue and EBITDA beat consensus forecasts and its Q3 and FY21 guidance came in above expectations as well. Samana believes "investors will reward the return to greater than 30% growth."
FinTech... from HR and Payroll?
Currently at the top of Paycom's corporate website, they show a handset with all kinds of employee benefit functions to access at the scroll and tap of one's fingers.
The caption reads "Tomorrow's Technology. Today. Comprehensive HR and Payroll Software."
And when you scroll down, you come across this claim about employee-managed data: "Your employees can access their info through easy-to-use tech, 24/7."
This includes requesting time off, seeing compensation, expenses, documents, and even performance.
This may be one reason that Paycom has such a rich valuation as they help corporations merge into the FinTech universe that their employees-as-consumers are now accustomed to with apps and access at their fingertips.
It certainly makes sense since we can access everything else in our financial lives this way.
Bigger competitor Workday, which is approaching $6 billion in revenues next year -- and was born of the PeopleSoft pioneers -- only trades at 12X sales growing 18%. They don't appear to claim prowess with a digital app for employee engagement with their data.
Interestingly enough, one of the oldest pioneers in the HR space is Paychex with expertise serving companies of less than 1,000 employees. Paychex launched in 1971 and went public in 1983, and I'm sure many Boomers and GenX-ers saw that mark on their paystub.
I recently saw CEO Martin Mucci on CNBC's TechCheck to discuss his company's "50 years of FinTech," and how the company stays relevant and competitive in the digital app world. You gotta love him for essentially staking claim to the ground of "we were doing fintech before you were born!"
By the way, PAYX trades under 10X sales -- approaching $4.5 billion -- while it grows in modest single digits. I would not ignore them because the right partner could take their access to America's small businesses -- employers and employees -- and explode the FinTech app opportunities.
Speaking of the broader FinTech arena, I did a little thing this week on all the innovations flooding into the market from hundreds of small startups that are putting traditional banks and financial transaction companies on notice about their dying tenure...
FinTech Unicorns: How to Spot Early Winners
And now that I think of it, the investor love for Paycom that is pushing it over $500 and nearly 30X sales may be due to one very smart and financially savvy woman: Barbara Corcoran.
I just recalled that the Shark Tank investor does commercials for them. God bless her if she got a few tens of thousands of shares at 2019 prices under $200.
What I didn't have time or room here to address is what these so-called HCM firms are doing with employee education and training that helps workers advance their careers whether they stay or go.
And then there's "financial literacy" where some companies go beyond just giving a 401k with a match to teaching their employees how to organize and manage their entire financial lives. I'll be doing more homework and content in this area soon.
So be sure to check out the article and video linked above and then click + Follow up above to be certain you are notified when I do more research on the exploding disruptive innovation in the FinTech arena.
Bear of the Day:
Benefitfocus is a $400 million provider of cloud-based software solutions to consumers, employers, insurance carriers and brokers. The company's platform of products and services enable customers to efficiently shop, enroll, manage and exchange benefits information.
I chose BNFT for the Bear of the Day for a couple of reasons -- besides the first criteria of being a Zacks #5 Rank due to falling earnings estimates.
First, I was an investor in BNFT shares in 2019 around $25 as I sought more software exposure in my Healthcare Innovators portfolio. I also saw the company as a potential M&A target, with a market valuation near $1 billion, for the likes of Workday or Paycom Software.
At the time of my investment, I noted that more than 23 million insured individuals and their dependents were managed on the platform.
Based in Charleston, South Carolina, the company was growing revenue in the high teens to over $350 million.
But I had to let it go below $20 in 2020 as the idea just wasn't working, and sales and EPS numbers just kept getting revised downward.
Coming out of the pandemic, shares got above $16 but have since slid again as each subsequent earnings report offers little for bulls to feed on.
Revenues have flat-lined just above $255 million and this year's consensus EPS of -0.41 cents represents an annual loss of 28%.
So the other reason I wanted to talk about the demise of BNFT is that it stands out as the proverbial black sheep among HR and benefit management companies who are growing strongly and their stocks making new highs.
See my Bull of the Day on Paycom for more on the success of several juggernauts in HR and Human Capital Management software systems.
In that piece, I also talk about the innovations of companies like Paycom into "fintech" arenas with progressive apps and data access for employees.
When you look at all the innovation happening across fintech, it appears there are many crossover applications to the communication between companies and their workers.
I expand on the universe of fintech disruption further in this week's edition of Cook's Kitchen...
FinTech Unicorns: How to Spot Early Winners
In that article and video, you'll get a good idea of the size of the revolutions occurring for over 20 different financially-connected industries and their customers -- which could represent another hundred industries.
While I wanted to see Benefitfocus succeed, and I still do, I'm glad I had the risk management sense to cut my losses long ago. Especially since there are hundreds of other new opportunities coming down the fintech river.
Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the Healthcare Innovators portfolio and recently bagged 90% gains in CRISPR stock Intellia Therapeutics (NTLA) this year.
Additional content:
Bet on 3 Permian Basin Stocks on Rising U.S. Shale Production
Production in U.S. shale plays continues to rise as oil price has recovered massively from the coronavirus pandemic-hit low mark in 2020. It seems that the glorious days for upstream energy players are gradually approaching, thanks to recovering fuel demand as coronavirus vaccines are rolling out at a massive scale.
EIA Expects US Shale Oil Production to Increase
In September, total production of oil from shale resources in the United States will likely increase by 49,000 barrels per day to 8.1 million barrels per day (MMBbl/D) – the highest since April 2020 – per the U.S. Energy Information Administration (EIA). The shale resources comprise Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian.
Of all the resources, Permian – the most prolific basin in the United States – will witness the highest increase in daily oil production this month, offsetting the volume declines in Eagle Ford, Bakken and Anadarko, according to EIA’s drilling productivity report. In the Permian, EIA projects oil production to rise by 49,000 barrels per day to 4.8 MMBbls/D in September, suggesting the highest level since March 2020.
Permian Explorers in the Spotlight
The increasing production in Permian is being backed by higher drilling activities. In its weekly release, Baker Hughes reported that from 179 oil rigs in the Permian for the week ended Jan 8, 2021, the tally has increased massively to 248 for the week ended Aug 27, 2021.
Recovery in oil price has been providing incentives to explorers and producers to gradually return to the shale play. With West Texas Intermediate crude price approaching the $70-per-barrel mark, oil price has recovered considerably from the pandemic-hit April last year, when the commodity was in the negative territory.
Thus, improving production in the Permian amid a favorable crude pricing environment has raised the incentive for adding stocks of companies operating in the most prolific basin.
3 Stocks to Buy
Since selecting the right companies, with a footprint in the Permian, from the stock universe is not an easy job, we are employing our proprietary Stock Screener to zero down on three prospective stocks. Two of the stocks sport a Zacks Rank #1 (Strong Buy), while one carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Devon Energy has a strong footprint in the Delaware Basin – a sub-basin of the broader Permian. The upstream player’s position in the sub-basin spans around 400,000 net acres across multiple formations. From the resources, the company is expecting high-margin growth, backed by excellent productivity. Of the total upstream budget for 2021, Devon has planned to allocate 80% capital toward the Delaware Basin.
So far this year, the #1 Ranked company has gained 78.7% and is well placed to gain further. Backed by strong results in the June quarter, the leading upstream energy player has declared a fixed-plus-variable dividend of 49 cents per share, reflecting an increase of 44% from the prior quarter.
Headquartered in Dallas, TX, Matador Resources has a strong footprint in the liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The Zacks #1 Ranked company has been ramping up production in the basin and has produced record daily barrels of oil equivalent volumes from Delaware in the recently concluded June quarter. By this year’s end, the company is expecting to have 34 gross operated wells in progress in the Delaware basin.
Shares of this leading upstream energy player have gained 136.4% so far this year, backed by investors’ excitement about strong second-quarter results. In the June quarter, the company’s average daily oil equivalent total production rose 26% sequentially, beating the guidance for an increment of 19 to 22%.
In the Permian basin, Chevron is among the largest oil and gas producers. From the Delaware and Midland sub-basins, the company is expecting to produce higher daily oil equivalent barrels in 2021 as compared to 2019. From operations in the prolific sub-basins, backed by continued efficiency improvements, the energy giant expects to generate more than $3 billion in free cashflow (excluding working capital) in 2021.
So far this year, the Zacks Rank of 2 company has gained 13.4%, backed by the news that it revived its stock repurchase program and vowed to buy back $2-$3 billion in shares annually, starting from the third quarter.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.