Here's Why It Is Worth Investing In Newfield (NFX) Stock Now

By Zacks Investment ResearchStock MarketsJan 24, 2018 01:08AM ET

www.investing.com/analysis/heres-why-it-is-worth-investing-in-newfield-nfx-stock-now-200283195

Here's Why It Is Worth Investing In Newfield (NFX) Stock Now

By Zacks Investment Research | Jan 24, 2018 01:08AM ET

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EOG

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On Jan 24, Newfield Exploration Company (NYSE:NFX) was raised to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Earnings estimate revisions are at the core of the Zacks investment philosophy. Stocks that have recently seen upward revision in estimates tend to outperform the market over the next nine to 12 months.

Over the last 60 days, the Zacks Consensus Estimate for 2017 earnings has been revised higher from $2.10 to $2.15. Also, for 2018, estimates were raised from $2.44 to $2.82.

Newfield has an impressive earnings surprise history. The upstream player managed to surpass the Zacks Consensus Estimate in three of the prior four quarters, the average positive surprise being 18.6%. Also, we expect the company to witness year-over-year earnings improvement of 110.8% in 2017 and 31.4% in 2018.

The business scenario looks profitable as West Texas Intermediate (WTI) oil is trading above the $60-per-barrel psychological mark, way higher than the historical low touched in February 2016. Also, natural gas crossed the mark of $3 per million British Thermal Unit (BTU). Overall, the favorable commodity pricing scenario could fetch the exploration and production company attractive cashflow.

The healthy commodity prices are especially favorable for Newfield as the company has a premium inventory of drilling wells in prospective oil and gas resources. In the liquid-rich Anadarko Basin, the upstream energy player has 350,000 net acres.

Newfield has no current debt and its long-term debt has declined steeply since 2014. Moreover, cash & equivalents rose significantly since 2016, reflecting strong balance sheet.

The company’s pricing chart looks impressive. Over the last six months, the stock has rallied 27%, outperforming the industry’s 21.9% gain.

Other Stocks to Consider

A few other prospective stocks in the energy sector are EOG Resources, Inc. (NYSE:EOG) , Cabot Oil & Gas Corporation (NYSE:COG) and Matador Resources Company (NYSE:MTDR) . All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Houston, TX, EOG Resources is a leading upstream energy player. We expect the company to see earnings growth of 157.2% and 206.9% in 2017 and 2018, respectively.

Headquartered in Houston, TX, Cabot is involved in exploration of oil and gas. The stock will likely report earnings growth of 357.1% in 2017.

Matador Resources, headquartered in Dallas, TX, is a leading upstream firm with operations in the prospective Eagle Ford shale play. The company beat the Zacks Consensus Estimate of earnings in three of the last four quarters, with an average positive surprise of 34.7%.

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Cabot Oil & Gas Corporation (COG): Free Stock Analysis Report

Newfield Exploration Company (NFX): Free Stock Analysis Report

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Matador Resources Company (MTDR): Free Stock Analysis Report

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Here's Why It Is Worth Investing In Newfield (NFX) Stock Now

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