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RPC (RES) Stock Surges 90.2% in the Past Year: Here's Why
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RPC, Inc. (RES - Free Report) shares have surged 90.2% in the past year compared with 1.6% growth of the composite stocks belonging to the industry.
The Zacks Rank #1 (Strong Buy) company, with a market cap of $1.7 billion, witnessed a rise in the Zacks Consensus Estimate for 2022 and 2023 earnings per share in the past 60 days.
Image Source: Zacks Investment Research
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The West Texas Intermediate crude price, which is currently hovering around $85 per barrel, has significantly improved over the past year. Global fuel demand has improved significantly, supported by strong economic growth.
The strong oil price scenario is encouraging customers to increase drilling activities, which might raise the company’s oilfield service demand. This is because RPC provides specialized oilfield services and equipment to almost all prospective oil and gas shale plays in the United States.
RPC expects its customers to respond to the favorable commodity pricing scenario. Hence, the company will plan for increased drilling and completion activities, translating into higher demand for its oilfield services and secure incremental cash flows. RPC expects to capitalize on the improving oilfield service demand.
The company is currently reconstructing an existing fleet that will be online in early 2023. It ordered a pressure-pumping fleet, which is expected to be delivered in the first half of 2023. This is expected to boost RPC’s utilization rate and profits in the coming quarters.
The company’s balance sheet strength is commendable. With no debt load, RPC had cash and cash equivalents of $78.2 million at the second-quarter end. It allows the company to remain afloat during tough times. RPC has the financial capabilities to make investments and generate strong cash flows.
Thus, RES, one of the leading oilfield service providers, is poised for an upside in the coming days.
Cactus Inc. (WHD - Free Report) is involved in manufacturing, designing and selling wellhead and pressure-control equipment. At the second-quarter end, Cactus had cash and cash equivalents of $311.7 million, which can provide it with immense financial flexibility. WHD has a strong balance sheet. It revealed that it has no bank debt outstanding as of Jun 30, 2022.
Cactus has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company beat the Zacks Consensus Estimate for earnings in the prior four quarters, delivering an earnings surprise of 12.7%. WHD is expected to see earnings growth of 143% in 2022.
Cenovus Energy Inc. (CVE - Free Report) is a leading integrated energy firm. Between 2020 and 2024, the company expects compound annual production growth of 2-3%.
Cenovus has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days. The company currently has a Zacks Style Score of A for Growth and B for Value. CVE is expected to see earnings growth of 321% for 2022.
Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA remains committed to returning excess cash to its shareholders through continued share buyback programs. The fuel retailer approved a repurchase authorization of up to $1 billion, which will commence once the existing $500-million authorization expires and be completed by Dec 31, 2026.
Murphy USA has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Momentum, and B for Value and Growth. MUSA is expected to see earnings growth of 62.7% in 2022.
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RPC (RES) Stock Surges 90.2% in the Past Year: Here's Why
RPC, Inc. (RES - Free Report) shares have surged 90.2% in the past year compared with 1.6% growth of the composite stocks belonging to the industry.
The Zacks Rank #1 (Strong Buy) company, with a market cap of $1.7 billion, witnessed a rise in the Zacks Consensus Estimate for 2022 and 2023 earnings per share in the past 60 days.
Image Source: Zacks Investment Research
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The West Texas Intermediate crude price, which is currently hovering around $85 per barrel, has significantly improved over the past year. Global fuel demand has improved significantly, supported by strong economic growth.
The strong oil price scenario is encouraging customers to increase drilling activities, which might raise the company’s oilfield service demand. This is because RPC provides specialized oilfield services and equipment to almost all prospective oil and gas shale plays in the United States.
RPC expects its customers to respond to the favorable commodity pricing scenario. Hence, the company will plan for increased drilling and completion activities, translating into higher demand for its oilfield services and secure incremental cash flows. RPC expects to capitalize on the improving oilfield service demand.
The company is currently reconstructing an existing fleet that will be online in early 2023. It ordered a pressure-pumping fleet, which is expected to be delivered in the first half of 2023. This is expected to boost RPC’s utilization rate and profits in the coming quarters.
The company’s balance sheet strength is commendable. With no debt load, RPC had cash and cash equivalents of $78.2 million at the second-quarter end. It allows the company to remain afloat during tough times. RPC has the financial capabilities to make investments and generate strong cash flows.
Thus, RES, one of the leading oilfield service providers, is poised for an upside in the coming days.
Other Stocks to Consider
Investors interested in the energy sector might look at the following companies that also presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Cactus Inc. (WHD - Free Report) is involved in manufacturing, designing and selling wellhead and pressure-control equipment. At the second-quarter end, Cactus had cash and cash equivalents of $311.7 million, which can provide it with immense financial flexibility. WHD has a strong balance sheet. It revealed that it has no bank debt outstanding as of Jun 30, 2022.
Cactus has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company beat the Zacks Consensus Estimate for earnings in the prior four quarters, delivering an earnings surprise of 12.7%. WHD is expected to see earnings growth of 143% in 2022.
Cenovus Energy Inc. (CVE - Free Report) is a leading integrated energy firm. Between 2020 and 2024, the company expects compound annual production growth of 2-3%.
Cenovus has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days. The company currently has a Zacks Style Score of A for Growth and B for Value. CVE is expected to see earnings growth of 321% for 2022.
Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA remains committed to returning excess cash to its shareholders through continued share buyback programs. The fuel retailer approved a repurchase authorization of up to $1 billion, which will commence once the existing $500-million authorization expires and be completed by Dec 31, 2026.
Murphy USA has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Momentum, and B for Value and Growth. MUSA is expected to see earnings growth of 62.7% in 2022.