All PR is good PRKey Stats:
Current Price: $16.21 (as of Nov. 22, 2024)
Market Cap: ~$9.5 billion
Dividend Yield: 4.2%
Next Earnings Date: Early Feb. 2025
Price Target Consensus: $18.93 (+16.8% upside)
Technical Reasons for Upside:
Breakout Alert: PR broke out of a tight consolidation between $15.50 and $16.10, supported by above-average volume. The next resistance lies near $18.00.
Momentum Indicators: RSI is trending toward overbought territory, a bullish sign in this context, while MACD shows positive divergence.
Energy Sector Tailwind: The Energy ETF (XLE) is rebounding off recent lows, boosting the broader sector sentiment. PR's tight correlation with crude oil prices also positions it to benefit from any seasonal rally.
Fundamental Reasons for Upside:
Earnings Strength: Q3 2024 earnings showed a 28% YoY revenue increase, driven by higher production efficiency and stable oil prices. Management increased FY2024 guidance, signaling confidence.
Cheap Valuation: PR trades at an EV/EBITDA multiple of 4.8x, below the sector average of 5.5x, making it an attractive value play in the Permian Basin.
Dividend & Buybacks: The company’s 4.2% dividend yield and ongoing share buybacks provide income support and reduce supply-side pressure on the stock.
Potential Paths to Profit:
Shares: The easiest path. Buy and hold until February for a target of $18.24.
Options: Consider February $16 calls for leverage. With implied volatility around 32%, they’re reasonably priced.
Spread it Out: Use a $16/$18 bull call spread to reduce upfront costs while still capitalizing on upside.
Disclaimer: We are not a brokerage or investment firm. We do not offer financial advice or investment advice and/or signals. This is not certified financial education. We offer access to the daily thought process of an individual and his experiences. We do not offer refunds. All sales are final.
