How Does Range Resources’ Stock Price Look ahead of 4Q15 Earnings?



Range Resources’ stock price is in downtrend

Declining crude oil and natural gas prices over the last one year are dragging the entire upstream sector into a downtrend. As seen in the below chart, Range Resources’ (RRC) stock price is in a downtrend where it is making a clear pattern of lower highs and lower lows.

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RRC’s stock price performance before 4Q15 earnings

Recently, RRC has shown a good relative strength when compared with other natural gas producers. In the last three months, RRC’s stock price has fallen by ~20%. In comparison, the ETF ISE-Reverse Nat Gas Index Fund (FCG) was down ~43% during the same period.

But in 2015, RRC underperformed bigger upstream companies from the S&P 500 (SPY). In 2015, RRC lost ~55%, whereas bigger oil and gas producers Occidental Petroleum (OXY), Pioneer Natural Resources (PXD), and EOG Resources (EOG) are down ~13%, ~16%, and ~23%, respectively.

RRC’s stock price performance after past earnings

RRC reported its 3Q15 earnings after the market close on October 28, 2015. In 3Q15, excluding the one-time items, RRC reported a profit of $0.03 per share, $0.08 better than the consensus for a loss of $0.05 per share. Following the earnings release, better-than-expected earnings helped RRC’s stock price increase by ~23% in six sessions.

Similar positive movement happened after 1Q15 and 4Q14 earnings when RRC’s stock price increased by ~4% and ~5% after beating the consensus earnings estimates by $0.03 per share and $0.11 per share, respectively.


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