Strength Seen in Centennial Resource (CDEV): Can Its 16.6% Jump Turn into More Strength?

Zacks Equity Research
·2-min read

Centennial Resource (CDEV) shares rallied 16.6% in the last trading session to close at $5.41. 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 52.1% gain over the past four weeks.

The decision from OPEC+ members to keep crude supply flat for the next month, in contrast to market anticipation, sent oil price soaring, which primarily drove Centennial Resource’s shares higher. Moreover, KeyBanc analyst Leo Mariani raising the price target for the company, keeping an Overweight rating, boosted investor confidence in the stock.

Price and Consensus

Price Consensus Chart for Centennial Resource
Price Consensus Chart for Centennial Resource

This company is expected to post quarterly loss of $0.02 per share in its upcoming report, which represents a year-over-year change of +91.7%. Revenues are expected to be $156.8 million, down 18.7% 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 Centennial Resource, the consensus EPS estimate for the quarter has been revised 33.3% 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 CDEV 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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