Coterra Energy Surprises with Strong Q2 Earnings, Analysts Bullish on Stock

Mizuho's Nitin Kumar raised their price target on Coterra Energy (NYSE: CTRA) by 8.8% from $34 to $37 on 2024/05/03. The analyst maintained their Strong Buy rating on the stock.

In an assessment of Coterra Energy's Q2 2024 earnings report, Kumar said the company "once again defied the naysayers - topping oil volumes."

For Q1 2024, Coterra Energy reported earnings per share (EPS) of $0.51, beating the Zacks Consensus Estimate of $0.41 but missing Q1 2023's EPS of $0.87 by 41.4%. The company also reported revenue of $1.43 billion, surpassing the Zacks Consensus Estimate of $1.38 billion but falling short of Q1 2023's revenue of $1.78 billion by 19.4%.

Coterra Energy's Q1 2024 performance included a capital expenditure (capex) of $450 million, discretionary cash flow of $797 million, and free cash flow of $340 million. The company achieved a total equivalent production of 686 thousand barrels of oil equivalent per day (MBoepd), with oil production reaching 102.5 thousand barrels of oil per day (MBopd) and natural gas production at 2,960 million cubic feet per day (MMcfpd).

Looking ahead, Coterra Energy's management provided guidance for Q2 2024, with capex projected to be between $470 million and $550 million. Total equivalent production for the quarter is expected to range from 625 MBoepd to 655 MBoepd, with oil production anticipated to be in the range of 103 MBopd to 107 MBopd, and natural gas production expected to be between 2,600 MMcfpd and 2,700 MMcfpd.

For the full year 2024, Coterra Energy forecasts capex between $1.75 billion and $1.95 billion, discretionary cash flow of $3.1 billion, and free cash flow of $1.3 billion. The company expects oil production to range from 102 MBopd to 107 MBopd.

Chairman, President, & CEO Tom Jorden expressed satisfaction with Coterra Energy's operational and financial results, attributing the company's success to its high-quality asset portfolio and top-tier operating team. Jorden emphasized the company's flexibility to capitalize on a potential shift in the natural gas macro as LNG exports increase and electricity demand grows. Coterra Energy aims to maintain consistent, profitable growth through market cycles by focusing on oil and liquids-rich plays while leveraging its low-cost, diversified asset portfolio.

According to top-rated analysts, 84.6% of them currently rate CTRA as a Strong Buy or Buy, while 15.4% consider it a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that CTRA's upcoming year will deliver earnings per share (EPS) of $1.31. If the analysts are correct, CTRA's next yearly EPS will experience a 24.3% decline compared to the previous year.

Since CTRA's latest quarterly report on May 2, 2024, the stock price has risen by 3.8%. Year-over-year, the stock has seen a 17% increase. However, during this period, CTRA has been trailing behind the S&P 500, which has experienced a 25.4% increase.

Mizuho analyst Nitin Kumar is ranked in the top 1% of Wall Street analysts by WallStreetZen, with an average return of 14.6% and a 61.6% win rate. Kumar specializes in the Real Estate and Energy sectors.

Coterra Energy Inc. is engaged in the exploration and production of oil, natural gas, and natural gas liquids. The company operates in the Permian Basin, Marcellus Shale, and the Anadarko Basin. Originally established as Cabot Oil & Gas Corporation, a subsidiary of Cabot Corporation, in 1989, the company is headquartered in Houston, TX.

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