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3 Energy Stocks Poised to Outshine Earnings Estimates in Q1

We are now in the middle of the first-quarter earnings, with majority of oil companies having reported results. As the pricing scenario was highly favorable, better-than-expected results are expected from ConocoPhillips COP and EOG Resources, Inc. EOG. Refining firm PBF Energy PBF is also in the spotlight.

Favorable Q1 Oil Price

Per data provided by the U.S. Energy Information Administration (“EIA”), the average West Texas Intermediate crude prices in January, February and March were recorded at $78.12 per barrel, $76.83 per barrel and $73.28 per barrel, respectively. In comparison, in the year-ago respective months, average oil prices were reported at $83.22 per barrel, $91.64 per barrel and $108.50 per barrel, according to EIA’s data.

Thus it is obvious that compared to the prior-year quarter, the pricing scenario of oil was not healthier. But, the crude pricing environment, although not as good as a year ago, was still highly favorable for exploration and production activities. A favorable commodity pricing scenario is likely to have aided the production of upstream energy players.

How to Pick the Right Stocks?

Given the backdrop, it is by no means an easy task for investors to arrive at picks that have the potential to deliver better-than-expected earnings from the vast universe of energy stocks.

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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 surprise in their upcoming earnings announcement. Our research shows that for stocks with this combination, the chance of an 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’re reported with our Earnings ESP Filter.

Our Choices

EOG Resources, a leading upstream firm, is likely to have witnessed gains from a favorable commodity pricing scenario and expected higher production.

EOG Resources has an Earnings ESP of +0.58% and currently carries a Zacks Rank #3. It is scheduled to release first-quarter results on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources, Inc. Price and EPS Surprise

EOG Resources, Inc. Price and EPS Surprise
EOG Resources, Inc. Price and EPS Surprise

EOG Resources, Inc. price-eps-surprise | EOG Resources, Inc. Quote

ConocoPhillips is a well-known name in the upstream business space and is likely to have benefited from favorable commodity prices in the March quarter. The firm, scheduled to report earnings on May 4,has an Earnings ESP of +0.13% and a Zacks Rank of 3.

ConocoPhillips Price and EPS Surprise

ConocoPhillips Price and EPS Surprise
ConocoPhillips Price and EPS Surprise

ConocoPhillips price-eps-surprise | ConocoPhillips Quote

In North America, PBF Energy is a leading independent refiner. The company is likely to have gained from year-over-year lower oil prices.  The firm, scheduled to release first-quarter earnings on May 5, has an Earnings ESP of +3.50% and a Zacks Rank #3.

PBF Energy Inc. Price and EPS Surprise

PBF Energy Inc. Price and EPS Surprise
PBF Energy Inc. Price and EPS Surprise

PBF Energy Inc. price-eps-surprise | PBF Energy Inc. Quote

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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ConocoPhillips (COP) : Free Stock Analysis Report

EOG Resources, Inc. (EOG) : Free Stock Analysis Report

PBF Energy Inc. (PBF) : Free Stock Analysis Report

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