With a market cap of around $17 billion, Coterra Energy Inc. (CTRA) is a premier, diversified energy company engaged in developing, exploring, and producing oil, natural gas, and natural gas liquids. The Houston, Texas-based company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies, and power generation facilities.
Companies worth more than $10 billion are generally labeled as “large-cap” stocks, and Coterra Energy fits this criterion perfectly. The company strives to be a leading energy producer, delivering sustainable returns through its diversified asset base. CTRA has focused operations in the Permian Basin, Marcellus Shale, and the Anadarko Basin.
Shares of CTRA have declined 23.3% from its 52-week high of $29.89, recorded in October last year. The oil and gas company’s shares have dipped 14.3% over the past three months, underperforming the broader iShares U.S. Oil & Gas Exploration & Production ETF’s (IEO) 5.9% decline over the same time frame.
Moreover, in the longer term, CTRA stock is down 10.2% on a YTD basis, lagging behind IEO’s 2.7% dip. Shares of CTRA have declined 17.9% over the past 52 weeks, underperforming IEO’s 9.2% drop over the same time frame.
To confirm its bearish trend, CTRA has been trading below its 200-day moving average since mid-July and has remained below its 50-day moving average since mid-June.
Coterra Energy's underperformance stems from its management's failure to optimize natural gas sales, as it continues to sell at discounted prices within the oversupplied Marcellus Basin instead of securing better prices in stronger markets. Moreover, the stock fell more than 5% following its Q2 earnings release on Aug. 1 due to weaker-than-expected natural gas prices, which led to a decline in earnings. The company reported adjusted earnings of $0.37 per share, which was hurt by rising operating expenses and lower natural gas production.
However, CTRA's declines over both periods are less pronounced than those of its rival, Devon Energy Corporation (DVN), which has declined 20.2% over the past 52 weeks and 12.5% on a YTD basis.
Despite CTRA’s underperformance, analysts remain optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from the 24 analysts in coverage, and the mean price target of $32.75 suggests a 43.8% premium to its current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
