What’s Driving Concho Resources?



Performance of Concho Resources stock

Concho Resources (CXO) stock has fallen 2.6% since the beginning of this year. As we can see in the image below, CXO’s movements have tracked movements in crude oil prices (UCO) (DBO). Since the beginning of this year, crude oil prices (UCO) (USO) have fallen ~0.55%.

In comparison, the Energy Select SPDR ETF (XLE) has fallen 10.9% since the beginning of the year. As we can see, CXO stock has overperformed XLE stock. However, both CXO and XLE have underperformed the broader market. The S&P 500 SPDR ETF (SPY) (SPX-Index) has risen 13.5% since the beginning of the year.

On September 20, 2017, crude oil prices rose above $50 for the first time after almost two months. Since then, crude oil prices have risen 3.2%. The recent uptick in crude oil prices is reflected in CXO stock prices as well. Concho’s stock has risen 6.6% in the same period.

Article continues below advertisement

Key management commentary

In reference to volatility in crude oil prices, CXO’s management commented during its 2Q17 earnings conference that oil markets remain volatile from a “macro perspective.” CXO’s management added, “we’re well-positioned for the volatility and we’ll continue to build value in all points of the cycle.” CXO still maintains a “cautious view” on commodity prices, and it remains on a trajectory to deliver 20% annualized production growth through 2019 within cash flow.


More From Market Realist