Chesapeake Energy (CHK) Soars 9.8%: Is Further Upside Left in the Stock?

Chesapeake Energy (CHK) shares ended the last trading session 9.8% higher at $83.80. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 23.8% loss over the past four weeks.

Chesapeake Energy ended sharply higher on Friday, driven by optimism over strong natural gas prices spurred by the ongoing strength in liquefied natural gas demand and geopolitical turmoil over Russian invasion of Ukraine. The steady increase in the fuel’s price to more than $6 per MMBtu has pushed drilling activity higher and contributed to the strength in Chesapeake Energy, a natural gas operator primarily in the Marcellus and Eagle Ford Shales. The recently announced boost to its stock buyback plan also had a strong positive effect on the stock price.

This oil and gas company is expected to post quarterly earnings of $3.15 per share in its upcoming report, which represents a year-over-year change of +92.1%. Revenues are expected to be $1.57 billion, up 126.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Chesapeake Energy, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CHK going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Chesapeake Energy belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, EQT Corporation (EQT), closed the last trading session 5.9% higher at $35.09. Over the past month, EQT has returned -30.1%.

For EQT Corporation , the consensus EPS estimate for the upcoming report has changed -3.6% over the past month to $0.46. This represents a change of +557.1% from what the company reported a year ago. EQT Corporation currently has a Zacks Rank of #3 (Hold).

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