Strength Seen in Callon (CPE): Can Its 8.5% Jump Turn into More Strength?

Zacks Equity Research
·2-min read

Callon Petroleum (CPE) shares rallied 8.5% in the last trading session to close at $33.70. 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 102.2% gain over the past four weeks.

The decision from OPEC+ members to not boost crude supply for the next month, in contrast to market anticipation, sent oil price soaring, which drove the upstream company’s shares. Moreover, rising demand for the commodity on the back of successful deployment of coronavirus vaccines is strengthening Callon Petroleum's performance.

Price and Consensus

Price Consensus Chart for Callon
Price Consensus Chart for Callon

This independent oil and gas company is expected to post quarterly earnings of $1.16 per share in its upcoming report, which represents a year-over-year change of -3.3%. Revenues are expected to be $312.5 million, up 7.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Callon, the consensus EPS estimate for the quarter has been revised 30.6% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CPE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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