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Analyzing Range Resources’s Stock Price ahead of Its 3Q16 Earnings

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Range Resources’s stock price action

After losing ~80% of its market capitalization from April 2014 to January 2016, Range Resources’s (RRC) stock price is finally showing signs of a new uptrend. In March 2016, as seen in the below chart, Range Resources’s stock price touched a higher high for the first time in almost two years. Since its January 2016 bottom, Range Resources’s stock price is up by a significant ~105%.

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Range Resources’s relative performance

Recently, Range Resources (RRC) has shown poor relative strength when compared with other natural gas (UNG) producers. In the last three months, Range Resources’s stock price has fallen ~11%. Compare this with the ISE-Revere Natural Gas Index ETF (FCG), which is up ~6% during the same period.

Range Resources’s year-to-date performance

For 2016, Range Resources is outperforming larger upstream companies from the S&P 500 (SPY). For 2016, RRC is up ~60%, whereas bigger oil and gas producers Occidental Petroleum (OXY), Pioneer Natural Resources (PXD), and EOG Resources (EOG) are up ~13%, ~50%, and ~36%, respectively.

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Range Resources’s stock price performance after past earnings

Range Resources (RRC) reported its 2Q16 earnings after the market closed on July 26, 2016. In 2Q16, excluding the one-time items, Range Resources reported an adjusted loss of $0.14 per share, which was $0.05 better than the consensus for a loss of $0.19 per share. Following the earnings release, better-than-expected earnings saw Range Resources’s stock price increase ~9% in five sessions.

Range Resources reported its 1Q16 earnings after the market closed on April 28, 2016. In 1Q16, excluding the one-time items, Range Resources reported an adjusted loss of $0.10 per share, which was $0.09 better than its consensus for a loss of $0.19 per share. Following the earnings release, better-than-expected earnings saw Range Resources’s stock price increase ~10% in one session.

RRC reported its 4Q15 earnings after the market closed on February 25, 2016. In 4Q15, excluding the one-time items, RRC reported a profit of $0.25 per share, which was $0.16 better than the consensus for a profit of $0.09 per share.  Following the earnings release, better-than-expected earnings saw Range Resources’s stock price increase ~45% in the seven sessions.

In 3Q15, excluding the one-time items, Range Resources reported a profit of $0.03 per share, which was $0.08 better than its consensus for a loss of $0.05 per share. Following the earnings release, better-than-expected earnings saw Range Resources’s stock price increase ~23% in the six sessions.

A similar positive reaction was observed after Range Resources’s 1Q15 and 4Q14 earnings, when its stock price increased ~4% and ~5% in one and three sessions, respectively. This rise occurred after beating the consensus earnings estimates by $0.03 per share and $0.11 per share, respectively.

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