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We are now midway through the fourth-quarter 2024 earnings season for the Oil – Energy sector, and results have been unfolding as expected. Earnings for S&P 500 energy companies are projected to decline 24.8% year-over-year, even as revenues edge up 2.1%.

So far, reported earnings have come in 33% lower than the same period last year, aligning with prior forecasts. This follows the 22.9% EPS drop in Q3, reflecting the continued challenges for the sector amid fluctuating commodity prices.

Oil and Gas Prices in Q4 2024

Crude oil prices faced significant headwinds in Q4 2024, marking a noticeable drop compared to the previous year. According to the U.S. Energy Information Administration, average WTI crude prices for October, November, and December 2023 were $85.64, $77.69, and $71.90 per barrel, respectively. In contrast, during the same months in 2024, prices fell to $71.99, $69.95, and $70.12 per barrel, respectively — a clear sign of weaker demand and increased supply.

Meanwhile, natural gas prices showed mixed trends. The U.S. Henry Hub averaged $2.20 in October, $2.12 in November, and rebounded to $3.01 in December 2024. While the early months saw lower prices than in 2023 ($2.98, $2.71, and $2.52, respectively), the late uptick in December suggests some resilience in gas demand.

3 Energy Stocks Set to Beat on Earnings

While the overall picture for Q4 energy earnings remains weak, a few stocks are positioned to deliver strong results -- and could even rally after their reports. Three stocks with momentum potential set to beat on earnings later this month include Magnolia Oil & Gas (MGY - Free Report), Occidental Petroleum (OXY - Free Report), and Coterra Energy (CTRA - Free Report).

All three companies carry a Zacks Momentum Score of either A or B. Additionally, these stocks have maintained ratings of Zacks Rank #3 (Hold), and they all share positive Earnings ESP. 

Why This Matters for Investors

Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better (Rank #1 or #2) and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings release. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Track

Provided below is a brief review of the above-mentioned stocks.

Magnolia Oil & Gas

Magnolia Oil and Gas is an independent exploration and production operator, with the Eagle Ford Shale and Austin Chalk formations in South Texas being its chief operating regions. The company focuses on growth through a combination of acquisitions and active drilling. Further, Magnolia has done a commendable job of enhancing its unit metrics, leading to attractive margins. The stock is also financially healthy, with modest debt and solid liquidity.

Magnolia Oil & Gas has an Earnings ESP of +1.73% and a Momentum Score of A. The firm is scheduled to release earnings on Feb. 18.

Coterra Energy

Next, Coterra Energy is an independent upstream operator primarily engaged in the exploration, development, and production of natural gas. Headquartered in Houston, TX, the firm owns some 183,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. The Zacks Rank #3 (Hold) rated company’s share of natural gas in its overall production is around 65%. 

Coterra Energy has an Earnings ESP of +0.10% and a Momentum Score of B. The firm is scheduled to release earnings on Feb. 24.

Occidental Petroleum

Houston, TX-based Occidental Petroleum Corporation is an integrated oil and gas company with significant exploration and production exposure. The Zacks Rank #3 (Hold) rated company is also a producer of a variety of basic chemicals, petrochemicals, polymers, and specialty chemicals.

The acquisition of CrownRock, strategic investments, cost management, strength in international operations, low-cost operations, and Permian Basin exposure all boost its performance.

Occidental Petroleum has an Earnings ESP of +3.00% and a Momentum Score of A. The company is scheduled to release earnings on Feb. 18.

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