Noble (NBL) Down 68% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Noble Energy (NBL). Shares have lost about 68% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Noble due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Noble Energy Q4 Loss Narrower Than Expected, Sales Top

Noble Energy, Inc. incurred an adjusted loss of 5 cents per share in fourth-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 9 cents.

Total Revenues

Noble Energy's total revenues were $1,174 million, beating the Zacks Consensus Estimate of $1,098 million by 6.9%. Revenues declined 1.9% from the year-ago quarter’s $1,197 million.

Highlights of the Release

In the quarter under review, sales volume averaged 373 thousand barrels of oil equivalent per day (MBoe/d), up 6% from the year-ago level. U.S. onshore volumes averaged 285 MBoe/d in the fourth quarter, up 12.6% from the prior-year period. Higher production from the DJ Basin drove U.S. onshore volumes.

Operating expenses in the reported quarter were $2,425 million, up 1.3% from the year-ago period.

Interest expenses in the reported quarter were $64 million, up 3% from the year-ago period.

During the reported quarter, Noble Energy commenced production from the Leviathan field ahead of schedule and more than $200 million under budget.

Realized Prices

U.S. onshore realized crude oil and condensate prices in the reported quarter improved 5.5% to $55.90 per barrel from the year-ago level of $52.98.

U.S. onshore natural gas prices were $1.72 per thousand cubic feet, down 40.1% year over year.

U.S. onshore realized prices for natural gas liquids also declined 41.2% from the year-ago quarter to $14.61 per barrel.

Financial Highlights

Noble Energy's cash and cash equivalents as of Dec 31, 2019 were $484 million compared with $716 million in the corresponding period of 2018.

Long-term debt was $7,477 million as of Dec 31, 2019 compared with $6,574 million in the comparable period of 2018.

Cash flow from operating activities in 2019 was $1,998 million, down from $2,336 million in 2018.

Guidance

Noble Energy expects to invest in the range of $1.6-$1.8 billion in 2020, indicating a decline from $560 million a year ago.

Sales volumes for 2020 are estimated to be 10% higher than 2019, at the midpoint of the company’s guided range of 385-405 MBoe/d. The improvement in volumes can be primarily due to commencement of offshore Israel Leviathan operations at the end of 2019.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -1175% due to these changes.

VGM Scores

Currently, Noble has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Noble has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.