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Analyzing Continental Resources’ Stock Performance

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Continental Resources’ stock performance

Continental Resources (CLR) stock has been on a consistent uptrend since the beginning of 2018. The stock has risen 12.6% year-to-date. Recently, the stock has been declining. The stock mirrored the recent decline in crude oil prices (DBO).

Continental Resources stock is trading higher than the levels last year. Continental Resources stock has risen ~86% YoY (year-over-year), while the Energy Select Sector SPDR ETF (XLE) has increased ~16%. Crude oil prices rose ~43.42% during the same period. In comparison, the broader market S&P 500 ETF (SPY) has risen ~14.79% YoY.

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What else is driving the stock?

Continental Resources reported upbeat first-quarter earnings and revenues, which were both higher on a YoY and a sequential basis. They were also higher compared to analysts’ estimates. Continental Resources generated $207 million in free cash flow, which allowed the company to bring its existing revolver balance down to zero and build its cash. At the end of the first quarter, Continental Resources’ total debt was $6.17 billion—close to the company’s short-term goal of $6 billion. Continental Resources’ long-term target is $5 billion.

Continental Resources has a market cap of $ 22.74 billion. Apache (APA), which has a lower market cap of $17.42 billion, reported total debt of $8.33 billion in the first quarter. Devon Energy (DVN), which has a slightly higher market cap of $23.69 billion, reported a total debt of $6.07 billion in the first quarter.

On April 30, Fitch gave Continental Resources an “investment grade” rating. On February 12, Standard & Poors upgraded Continental Resources to “investment grade.”

New pipeline capacity in the Bakken, which has helped lower the Bakken oil differentials, could be a key stock driver this year.

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