We expect oil and gas exploration as well as production
Noble Energy Inc.
) to surpass our expectation in its second quarter, results of
which are scheduled to be released before the market bell on Jul
Why a Likely Positive Surprise?
Our proven model shows that Noble Energy is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at +4.17%. This is
a very meaningful and leading indicator of a likely positive
earnings surprise for the shares.
Zacks Rank #3 (Hold):
Note that stocks with Zacks Ranks of #1, 2 and 3 have a
significantly higher chance of beating earnings. The Sell rated
stocks (#4 and 5) should never be considered going into an
The combination of Noble Energy's Zacks Rank #3 (Hold) and
+4.17% ESP makes us confident of a positive earnings beat on Jul
What is Driving the Better Than Expected
The operational start-up of the Swordfish block in the Gulf of
Mexico and continual growth in the Denver/Julesburg (DJ) and
Marcellus horizontal programs will boost production and act as a
key earnings driver for Noble Energy.
The increased demand for natural gas in Israel will ramp up
the company's gas sales from its Tamar play in Eastern
Mediterranean especially in the peak summer season.
The last two quarters saw positive earnings surprises, which
led to an average beat of 36.6%. We believe Noble Energy's
aggressive efforts to expand its exploration options will help
retain its good run.
Other Stocks to Consider
Noble Energy is not the only firm looking up this earnings
season. We also see likely earnings beats coming from these three
Memorial Production Partners LP.
), Earnings ESP of +19.51% and Zacks Rank #1 (Strong Buy).
Carrizo Oil & Gas, Inc.
), Earnings ESP of +5.56% and Zacks Rank #2 (Buy).
EXCO Resources, Inc.
), Earnings ESP of +9.09% and Zacks Rank #2 (Buy).
CARRIZO OIL&GAS (CRZO): Free Stock Analysis
MEMORIAL PRODUC (MEMP): Free Stock Analysis
NOBLE ENERGY (NBL): Free Stock Analysis
EXCO RESOURCES (XCO): Free Stock Analysis
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