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Antero Resources (AR) Gains 44.5% in 3 months: What's Ahead?

Antero Resources Corporation’s AR shares have jumped 44.5% in the past three months compared with the industry’s 11.4% rise. The stock benefited from a steady recovery in natural gas and oil prices.

It primarily produces natural gas in the Appalachian Basin and is one of the fast-growing producers in the United States. The company focuses on unconventional reservoirs. As such, the rise in gas prices created a favorable market scenario for Antero Resources. Natural gas prices are currently trading at a multi-year high, well beyond the $5 threshold. Rising consumption in Asia and Europe, and low supply of the commodity are keeping the price high. Denver, CO-based Antero Resources — with a market cap of $6 billion — is enjoying the benefits of high commodity prices.

Can It Retain Momentum?

The answer is yes and here’s why we think so:

With an improving economic outlook around the world, energy demand is expected to witness a sustainable rise in the coming days. This creates a perfect scenario for Antero Resources’ upstream business. The bullish natural gas price outlook is likely to keep favoring the stock. A cold winter this year is expected to further boost natural gas demand and the company’s profits.

Additionally, it expects net marketing expenses in the range of 8-10 cents per thousand cubic feet of natural gas equivalent for 2021, indicating a decline from 12 cents and 22 cents in 2020 and 2019, respectively. The decrease in costs will boost the company’s bottom line.

Estimates

The Zacks Consensus Estimate for Antero Resources’ 2021 bottom line is pegged at $1.63 per share, signaling a massive improvement from the year-ago loss of 56 cents. Also, the consensus estimate for 2021 revenues stands at $4.7 billion, indicating a rise of 16.4% year over year. The company beat earnings estimates twice in the last four quarters and missed on the other two occasions.

Antero Resources Corporation Price and EPS Surprise

Antero Resources Corporation Price and EPS Surprise

Antero Resources Corporation price-eps-surprise | Antero Resources Corporation Quote

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space include Extraction Oil & Gas, Inc. XOG, Cheniere Energy, Inc. LNG and Schlumberger Limited SLB, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Extraction Oil & Gas’ bottom line for 2021 is pegged at $13.07 per share, indicating a massive improvement from last year’s loss of $2.54.

Cheniere Energy’s bottom line for third-quarter 2021 is expected to surge 239.1% year over year.

Schlumberger’s bottom line for 2021 is expected to rise 83.8% year over year.


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