#7 - Antero Resources (NYSE:AR)
Antero Resources Corp. (NYSE: AR) is up about 26% in 2024, and the immediate reason is not about natural gas but crude oil. The company was one of the beneficiaries when the OPEC+ nations capped their output. That created an opportunity for U.S. companies, and Antero stepped in.
As with other names on this list, Antero operates in the Appalachian basin, which is critical for natural gas production. In the company’s most recent earnings report, it reported an average net production of 3.4 billion cubic feet equivalent per day. That was a 1% year-over-year increase, and the company raised its full-year guidance.
The short-term concern about Antero is the company’s valuation. The stock trades at a price-to-earnings (P/E) ratio of 144x as of October 10, 2024. However, the company is expected to post strong earnings growth that may support higher prices. To that end, analysts remain mostly bullish on the stock, maintaining a Moderate Buy rating and a $32.81 price target, which still gives investors a 13% upside.
About Antero Resources
Antero Resources Corporation, an independent oil and natural gas company, engages in the development, production, exploration, and acquisition of natural gas, natural gas liquids (NGLs), and oil properties in the United States. It operates in three segments: Exploration and Development; Marketing; and Equity Method Investment in Antero Midstream.
Read More - Current Price
- $30.93
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 11 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $34.78 (12.4% Upside)
As this presentation shows, the natural gas industry has inherent complexity. However, from an investment standpoint, it boils down to the economics of supply and demand. When demand outpaces supply, whether in reality or by perception, natural gas prices rise. Conversely, when the market is well supplied, prices fall.
However, as two recent hurricanes made clear, it doesn't take much to disrupt the delicate balance of supply and demand. And as investors saw in 2022 and are seeing again in 2024, geopolitical events can cause the price of natural gas to spike.
It's fair to say that prepping for black swan events is more the domain of nimble traders. But even if you're a long-term investor, it can make sense to have exposure to natural gas stocks like the ones in this presentation. Not only can they offer value as good momentum plays, but some of these stocks pay a dividend that can help investors generate additional income.
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