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How Has Encana Stock Reacted after Other Earnings Beats?

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Encana stock on the day of its 2Q16 earnings release

Encana (ECA) announced its 2Q16 earnings on July 21, 2016, before the Market opened. After the announcement, Encana stock rose 4.0% to close at $8.29. In intraday action, the stock was trading higher by ~10% but saw a reversal in the middle of the day to close in a reversal pattern.

It’s worth noting that in the three months before the earnings release, Encana stock rose ~17%. This was mainly due to the ~21% bounce in natural gas (UNG) (UGAZ) (DGAZ) prices during the same period.

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Encana stock price trend change

After losing ~87% of its market capitalization from June 2014 to February 2016, Encana (ECA) stock is finally showing signs of a new uptrend. In March 2016, as you can see in the above graph, Encana stock reached a higher high in April 2016 and crossed its 200-day moving average. Currently, the stock is trading ~28% above its 200-day moving average.

Encana’s 2016 relative performance

For 2016, Encana is outperforming larger upstream companies from the S&P 500 (SPY). Encana has risen ~64%, whereas bigger oil and gas producers such as Occidental Petroleum (OXY), Noble Energy (NBL), and EOG Resources (EOG) have risen ~14%, ~8%, and ~16%, respectively.

Encana stock after other earnings beats

In the last four quarters, Encana beat earnings expectations twice, once in 3Q15 and again in 4Q15. Encana reported its 4Q15 earnings before the Market opened on February 24, 2016. Excluding one-time items, ECA reported a profit of $0.13 per share, which was $0.12 better than the consensus of $0.01 per share. Following the earnings release, better-than-expected earnings saw Encana stock rise ~103% in nine sessions.

There was also a positive reaction after the 3Q15 earnings. Encana stock rose ~14% in four sessions after beating consensus earnings estimates by $0.01 per share.

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