3 Oil & Gas Stocks Under $10 That Can Gain More Than 35% According to Analyst Estimates The oil & gas industry has benefited significantly from skyrocketing crude oil and natural gas prices in recent months. And limited supply and increasing demand for energy with the reopening...
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The oil & gas industry has benefited significantly from skyrocketing crude oil and natural gas prices in recent months. And limited supply and increasing demand for energy with the reopening of the economy should keep driving the industry's growth. As such, Wall Street analysts expect low-priced oil & gas stocks Comstock Resources (CRK), Tellurian (TELL), and W&T Offshore (WTI) to gain more than 35% in price in the near term. So, we think it could be worth adding these stocks to one's watchlist. Read on.
Increasing demand for energy with the economy's reopening and limited supply has caused crude oil and natural gas prices to rise this year, benefiting the oil & gas industry. The oil and gas market is expected to reach $7.43 trillion by 2025, registering a 6% CAGR.
The EIA said in its latest STEO that "crude oil prices have risen over the past year as a result of steady draws on global oil inventories, which averaged 1.9 million barrels per day during the first three quarters of 2021". Also, according to a Deloitte report, the oil and gas industry has rebounded strongly throughout 2021. The report also stated that oil and gas companies are rebuilding themselves for a strategic transformation in 2022.
Therefore, we think it could be worth watching oil & gas stocks Comstock Resources, Inc. (CRK), Tellurian Inc. (TELL), and W&T Offshore, Inc. (WTI), each of which is trading at below $10. Wall Street analysts expect these stocks to gain more than 35% in price in the near term.
Comstock Resources, Inc. (CRK)
CRK is an independent natural gas producer that is based in Frisco, Tex. Its operations are focused on the development of the Haynesville shale in North Louisiana and East Texas. As of December 31, 2020, the company had 5.6 trillion cubic feet of natural gas equivalent and 17 million barrels of oil equivalent of proved reserves. CRK also owns interests in 2,864 producing oil and natural gas wells.
This month, CRK partnered with MiQ to independently certify its natural gas production in North Louisiana and East Texas. Through this partnership, the company's commitment to produce natural gas under strict environmental standards and deliver differentiated, responsibly sourced gas has been highlighted.
CRK's natural gas sales increased 190% year-over-year to $488.3 million for the third quarter, ended September 30, 2021. The company's oil sales grew 137.3% from their year-ago value to $22.87 million. Its operating income rose 2,291.8% from the prior-year quarter to $295.75 million. Also, the company's cash and cash equivalents came in at $27.84 million during the period.
Analysts expect CRK's revenue to increase 89.4% year-over-year to $1.63 billion in its fiscal year 2021. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. Its EPS is estimated to grow 495.7% in the current year. The stock has soared 68.4% in price over the past year and 96.6% year-to-date. The $12 average analyst price target represents a 39.7% potential upside.
Tellurian Inc. (TELL)
Global natural gas company TELL, in Houston, Tex., engages in natural gas production and liquefied natural gas (LNG) marketing. The company has an approximately 27.6 million tonnes per annum LNG terminal facility and an associated pipeline in Southwest Louisiana. Also, TELL owns interests in 9,373 net acres of natural gas production assets and 72 producing wells located in the Haynesville Shale trend of northern Louisiana.
Last month, TELL transferred the listing of its common stock from the Nasdaq Capital Market to the NYSE American. The company believes that transferring the stock listing to the NYSE American will allow it to leverage the exchange's prestigious trading platform to the benefit of the company's shareholders.
During the third quarter, ended September 30, 2021, TELL's total revenue increased 9.6% year-over-year to $15.64 million. The company's loss from operations decreased 3.1% from its year-ago value to $14.52 million. Its net loss declined 45.9% from the prior-year quarter to $15.93 million. Also, the company's loss per share declined 60% year-over-year to $0.04.
TELL's revenue is expected to increase 105.6% year-over-year to $ 142.04 million in its fiscal year 2022. Its EPS is estimated to grow 69.6% in the current year. The stock has surged 123.5% over the past year and 160.2% year-to-date. The $7 consensus price represents represents a 109.6% potential gain.
W&T Offshore, Inc. (WTI)
WTI in Houston, Texas., is an independent oil and natural gas producer that explores and develops oil and natural gas properties in the Gulf of Mexico. The company has interests in 43 offshore fields in federal and state waters and 146 offshore structures. WTI sells crude oil, natural gas liquids, and natural gas and has 144.4 million barrels of oil equivalent.
WTI's total revenues increased 84.7% year-over-year to $133.95 million in the third quarter, ended September 30, 2021. The company's cash and cash equivalents grew 489.1% to $257.58 million as of September 30, 2021, from $43.73 million as of December 31, 2020. Its revenues under the Oil segment rose 59.4% from the prior-year quarter to $74.27 million. Also, the company's revenues under the Natural segments increased 134.9% year-over-year to $45.14 million.
Analysts expect WTI's revenue for its fiscal year 2021 to be $530.2 million, representing 53% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. Its EPS is expected to grow 143.8% in the current year. The stock has gained 66.2% in price over the past year and 63.1% year-to-date. The $6.2 average analyst price target represents a 74.7% potential upside.
CRK shares were unchanged in premarket trading Monday. Year-to-date, CRK has gained 96.57%, versus a 23.96% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research.
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