Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

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23. Coterra Energy Inc. (NYSE:CTRA)

Consensus ROE: 16%

Number of Hedge Fund Investors in Q2 2024: 48

Coterra Energy Inc. (NYSE:CTRA) is an American oil and gas company with operations in the lucrative Permian Basin, Pennsylvania, and Oklahoma. As of the second quarter, the firm had a stellar record of production performance by having beaten guidance in all seven of its consecutive quarters. This comes at a time when the broader US oil industry has struggled due to lower prices driving down production. However, turmoil in the energy industry hasn’t left Coterra Energy Inc. (NYSE:CTRA) unscathed as the firm has struggled in the wake of falling gas prices. These have made it reduce gas production by 275 million cubic feet per day (mcfd) and also delayed plans to expand capacity. Coterra Energy Inc. (NYSE:CTRA)’s income statement has suffered as a result, with the firm missing second quarter EPS estimates of $0.39 by posting $0.37. Additionally, while its operating income jumped by 7.3% in the quarter, expenses also grew by 7.4% to remove some of the impact.

During the Q2 2024 earnings call, Coterra Energy Inc. (NYSE:CTRA)’s management shared its outlook for Q3 and plans to manage the gas turmoil:

“During the third quarter of 2024, we expect total production to average between 620 to 650 MBoepd. Oil to be between 107.0 and 111.0 MBopd, and natural gas to be between 2.5 and 2.63 Bcf per day. Continued strong execution and well performance is expected to drive oil volume growth of approximately 2% quarter-over-quarter. Third quarter gas production will be impacted by our plan to curtail approximately 275 million cubic feet per day net in the Marcellus for August and September due to low expected in-basin pricing.

This will drive a decline in natural gas volumes quarter-over-quarter, but not have a material impact on our cash flow. We will continue to monitor gas fundamentals closely and retain the optionality to respond to market signals on a month-to-month basis.”

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