uploads///DNR Q Post Annotations

How Denbury Resources’s Stock Price Reacted after Past Earnings Beats


Aug. 10 2016, Updated 10:05 a.m. ET

Denbury Resources’s stock price action following 2Q16 earnings

Denbury Resources (DNR) announced its 2Q16 earnings on August 4, 2016, before the Market opened. After its 2Q16 earnings are announced, Denbury Resources’s stock price increased by ~14% in the two trading sessions.

In the last three months leading into the earnings, Denbury Resources’s stock price has decreased by ~27%, mainly due to the ~7% decrease in crude oil (USO) (UWTI) (DWTI) prices during the same period.

Article continues below advertisement

Denbury Resources’s stock price trend change

After losing ~95% of its market capitalization from June 2014 to January 2016, Denbury Resources’ (DNR) stock price is finally showing signs of a new uptrend. In April 2016, as seen in the above chart, Denbury Resources’s stock price made a higher high and in the same month, it also crossed the 200-day moving average.

Currently, DNR’s stock price is trading ~4% above its 200-day moving average. Since its January 2016 bottom, Denbury Resources’s stock price is up by a whopping ~251%.

DNR’s 2016 relative performance

For 2016, DNR is outperforming bigger upstream companies from the S&P 500 (SPY). For 2016, DNR is up by ~50%, whereas larger oil and gas producers Marathon Oil (MRO), Devon Energy (DVN), and EOG Resources (EOG) are up by ~12%, ~25%, and ~28%, respectively.

DNR’s stock price behavior after past earnings beats

In the last six quarters, there were three occasions (the 1Q16, 3Q15, and 2Q15 earnings) when Denbury Resources beat the earnings expectations.

Denbury Resources reported its 1Q16 earnings before the Market opened on May 5, 2016. In 1Q16, excluding the one-time items, Denbury Resources reported a loss of $0.03 per share, $0.04 better than the consensus for a loss of $0.07 per share. Following the earnings release, better-than-expected earnings saw Denbury Resources’s stock price increase by ~36% in the six sessions.

For its 3Q15 earnings, excluding the one-time items, DNR reported a profit of $0.18 per share, $0.05 better than the consensus for a profit of $0.13 per share. Following the earnings release, better-than-expected earnings saw DNR’s stock price increase by ~13% in the two sessions.

A contrarian reaction was observed after its 2Q15 earnings, when DNR’s stock price decreased by ~13% in the one session, even after beating the consensus earnings estimates by $0.01 per share.


More From Market Realist