Earthstone Energy (ESTE) Moves 5.7% Higher: Will This Strength Last?

Zacks Equity Research
·2-min read

Earthstone Energy (ESTE) shares rallied 5.7% in the last trading session to close at $8.01. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 26.3% gain over the past four weeks.

Earthstone Energy extended its rally for the fourth straight day, driven by optimism over the OPEC+ cartel’s surprise decision to extend the oil production cuts till the end of April. The stock has also been driven up by an earlier-than-expected pickup in the commodity’s demand on the back of successful deployment of COVID-19 vaccines. The recovery in crude prices to more than $60 a barrel has pushed drilling activity higher and contributed to the strength in Earthstone Energy.

Price and Consensus

Price Consensus Chart for Earthstone Energy
Price Consensus Chart for Earthstone Energy

This oil and gas company is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of -75%. Revenues are expected to be $40.51 million, down 39.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Earthstone Energy, the consensus EPS estimate for the quarter has been revised 29.2% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ESTE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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