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Coterra Energy (CTRA)
NYSE:CTRA

Coterra Energy (CTRA) AI Stock Analysis

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Coterra Energy

(NYSE:CTRA)

Rating:76Outperform
Price Target:
$29.00
▲(15.35%Upside)
Coterra Energy's strong financial performance and effective operational management in the earnings call are major positives, supporting the company's resilience. Technical analysis and valuation provide a balanced view, while potential operational challenges and oil price concerns slightly weigh on the outlook.
Positive Factors
Capital Efficiency
CTRA showed solid capital efficiency in the first quarter as it worked to integrate recent acquisitions.
Dividend Increase
The base dividend was increased by ~5% to $0.88/sh annually (~3.1% yield).
Portfolio Strategy
CTRA showcased the strength of its diversified portfolio of core assets by reducing oil-directed activity in the Permian Basin and increasing natural gas focused activity in the Marcellus to create a more efficient and resilient program.
Negative Factors
Cost Challenges
EBITDAX was 2% below expectations due to higher than expected costs.
Guidance Shortfall
1Q25 oil production guidance was set 4.3% below the estimate and 3.9% below Consensus.
Quarterly Performance
CTRA reported disappointing 1Q25 results on lower than expected oil/NGL production volumes.

Coterra Energy (CTRA) vs. SPDR S&P 500 ETF (SPY)

Coterra Energy Business Overview & Revenue Model

Company DescriptionCoterra Energy Inc. (CTRA) is an independent oil and gas company engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids. The company operates primarily in the United States, with core activities in the Permian Basin, Marcellus Shale, and Anadarko Basin. Coterra Energy focuses on optimizing its resource base to maximize efficiency and sustainability in energy production.
How the Company Makes MoneyCoterra Energy generates revenue primarily through the sale of oil, natural gas, and natural gas liquids produced from its exploration and production activities. The company monetizes its hydrocarbon reserves by extracting, processing, and selling these resources to refineries, utilities, and other market participants. Key revenue streams include the sale of crude oil, natural gas, and natural gas liquids at market prices, which can fluctuate based on supply and demand dynamics. Additionally, Coterra may enter into hedging contracts to manage price volatility and secure predictable cash flows. Strategic partnerships and joint ventures can also play a role in expanding its operational capabilities and enhancing its production efficiency.

Coterra Energy Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: 0.36%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
Coterra demonstrated strong operational and financial performance, exceeding production guidance and successfully integrating recent acquisitions. However, mechanical issues with Harkey wells and concerns about potential oil price weakness led to reduced activity in the Permian Basin. Despite these challenges, the company's financial flexibility and strategic adjustments position it well for future resilience.
Q1-2025 Updates
Positive Updates
Exceeding Production Guidance
Coterra delivered oil production near the high end of guidance and natural gas production exceeded the high end of guidance. CapEx was near the low end of guidance.
Strong Financial Performance
Free hedge revenues increased to $2 billion, up from $1.4 billion in the previous quarter, driven by a 64% increase in natural gas price realizations.
Successful Acquisitions and Integration
Coterra successfully closed the Franklin Mountain and Avant acquisitions and identified significant operational efficiencies.
Debt Reduction
The company retired $250 million of term loans and plans to fully repay the $1 billion term loan during 2025.
Operational Flexibility
Coterra demonstrated the ability to adjust capital allocation by reducing CapEx by $100 million and reallocating activity between the Permian Basin and Marcellus Shale.
Negative Updates
Mechanical Issues with Harkey Wells
Coterra experienced mechanical issues with Harkey wells due to inadequate cementing, leading to high water production. Remediation efforts are underway, but production has been paused.
Potential Oil Price Weakness
Coterra expressed concerns about potential future weakening in oil prices, leading to a reduction in activity in the Permian Basin.
Oil Production Reduction
The net result of changes in activity is expected to reduce oil production by approximately 5,000 barrels per day in the second quarter relative to previous expectations.
Company Guidance
In the Coterra Energy First Quarter 2025 Earnings Call, key guidance metrics were highlighted by Tom Jorden, Chairman, CEO, and President. The company reported oil production near the high end of its guidance and natural gas production exceeding the high end. Capital expenditures (CapEx) were near the low end of guidance, and Coterra returned a substantial portion of free cash flow to owners while retiring $250 million of term loans. The company revised its 2025 CapEx forecast, reducing it by $100 million, with cuts of $150 million in the Permian Basin and an increase of $50 million in the Marcellus Shale. Despite these changes, Coterra maintained its full-year production guidance, projecting total production to average between 710 and 760 MBoe per day in the second quarter, with oil expected between 147 and 157 MBoe per day and natural gas between 2.7 and 2.85 Bcf per day. Coterra remains committed to debt reduction, particularly the $1 billion term loan from recent acquisitions, and plans to maintain a reinvestment rate of around 50% of cash flow.

Coterra Energy Financial Statement Overview

Summary
Coterra Energy displays strong overall financial performance with impressive cash flow management, solid profit margins, and a healthy balance sheet. Despite a revenue setback in 2023, the company's financial fundamentals remain robust.
Income Statement
78
Positive
Coterra Energy has demonstrated strong revenue growth, particularly notable from 2020 to 2022, although there was a decline in 2023. The company maintains healthy profit margins, with a robust net profit margin. However, the significant drop in total revenue in 2023 suggests potential market or operational challenges.
Balance Sheet
82
Very Positive
The company maintains a solid balance sheet with a strong equity base and a manageable level of debt, reflected in a favorable debt-to-equity ratio. The equity ratio indicates a stable financial position, supporting long-term sustainability. The decreasing trend in total debt from 2022 to 2023 further strengthens the financial stability.
Cash Flow
88
Very Positive
Coterra Energy shows impressive cash flow management, with consistent free cash flow generation and a strong operating cash flow to net income ratio. The positive free cash flow growth rate from 2020 to 2023 indicates efficient capital management and operational efficiency.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.95B5.46B5.68B9.51B3.45B1.47B
Gross Profit2.04B2.00B2.51B8.10B1.94B431.22M
EBITDA3.63B3.30B3.84B6.88B2.26B691.00M
Net Income1.28B1.12B1.63B4.07B1.16B201.00M
Balance Sheet
Total Assets22.27B21.63B20.41B20.15B19.90B4.52B
Cash, Cash Equivalents and Short-Term Investments186.00M2.04B956.00M673.00M1.04B140.00M
Total Debt0.003.80B2.53B2.60B3.46B1.17B
Total Liabilities4.89B8.50B7.37B7.48B8.11B2.31B
Stockholders Equity17.37B13.12B13.05B12.66B11.74B2.22B
Cash Flow
Free Cash Flow1.26B1.02B1.56B3.75B939.00M202.39M
Operating Cash Flow3.08B2.79B3.66B5.46B1.67B778.24M
Investing Cash Flow-4.78B-1.76B-2.06B-1.67B313.00M-584.00M
Financing Cash Flow622.00M279.00M-1.32B-4.14B-1.09B-255.85M

Coterra Energy Technical Analysis

Technical Analysis Sentiment
Negative
Last Price25.14
Price Trends
50DMA
25.11
Positive
100DMA
25.91
Negative
200DMA
25.53
Negative
Market Momentum
MACD
-0.09
Positive
RSI
44.82
Neutral
STOCH
24.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTRA, the sentiment is Negative. The current price of 25.14 is below the 20-day moving average (MA) of 25.92, above the 50-day MA of 25.11, and below the 200-day MA of 25.53, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 44.82 is Neutral, neither overbought nor oversold. The STOCH value of 24.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CTRA.

Coterra Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DVDVN
79
Outperform
$22.42B7.9520.88%2.75%12.06%-16.37%
OVOVV
77
Outperform
$10.21B16.736.17%2.92%-14.46%-67.20%
EQEQT
76
Outperform
$34.22B94.602.06%1.15%39.56%-59.84%
76
Outperform
$18.94B14.499.40%3.49%10.33%-0.13%
WDWDS
75
Outperform
$29.59B8.3810.23%6.71%-0.93%115.30%
68
Neutral
$15.27B10.036.34%5.16%4.13%-66.99%
ARAR
67
Neutral
$11.37B49.103.21%6.67%240.70%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CTRA
Coterra Energy
25.14
-0.95
-3.64%
DVN
Devon Energy
34.59
-10.38
-23.08%
OVV
Ovintiv
40.50
-6.22
-13.31%
EQT
EQT
54.88
18.25
49.82%
WDS
Woodside Energy Group
15.69
-2.69
-14.64%
AR
Antero Resources
35.56
3.08
9.48%

Coterra Energy Corporate Events

Executive/Board Changes
Coterra Energy Announces Board Member Retirements
Neutral
Feb 24, 2025

On February 19, 2025, Coterra Energy announced that Dan O. Dinges and Robert S. Boswell will retire from the Board of Directors at the end of their current terms and will not stand for re-election at the 2025 annual meeting of stockholders. Dinges, who has a long history with the company and its predecessor, Cabot Oil & Gas, and Boswell, with extensive experience in the oil and gas industry, have both contributed significantly to Coterra’s development. Their retirements are not due to any disagreements with the company, and their leadership has been acknowledged as having strengthened and made Coterra more resilient.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 28, 2025