Southwestern Energy Company (SWN) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

Southwestern Energy Company (NYSE: SWN) stock fell -4.06% on Tuesday to $5.67 against a previous-day closing price of $5.91. With 27.92 million shares changed hands, the volume of the stock remained heavier than its average volume of 23.56 million shares. During the session, the Oil & Gas E&P company that operates in wider Energy sector, reached to the highest price of $5.89 whereas the lowest price it dropped to was $5.63. The 52-week range on SWN shows that it touched its highest point at $9.87 and its lowest point at $3.81 during that stretch. It currently has a 1-year price target of $10.34. Beta for the stock currently stands at 1.36.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SWN was down-trending over the past week, with a drop of -5.66%, but this was down by -8.10% over a month. Three-month performance dropped to -8.84% while six-month performance fell -21.14%. The stock gained 40.69% in the past year, while it has lost -3.08% so far this year. A look at the trailing 12-month EPS for SWN yields 1.37 with Next year EPS estimates of 1.76. For the next quarter, that number is 0.29. This implies an EPS growth rate of 99.40% for this year and 39.35% for next year. EPS is expected to grow by 20.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 65.30%.

Float and Shares Shorts:

At present, 1.11 billion SWN shares are outstanding with a float of 1.10 billion shares on hand for trading. On Oct 13, 2022, short shares totaled 47.54 million, which was 4.27% higher than short shares on Sep 14, 2022. In addition to Mr. William J. Way as the firm’s Pres, CEO & Director, Mr. Carl Fredrick Giesler Jr. serves as its Exec. VP & CFO.


Institutional Ownership:

Through their ownership of 87.39% of SWN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 42.68% of SWN, in contrast to 34.49% held by mutual funds. Shares owned by individuals account for 1.28%. As the largest shareholder in SWN with 10.18% of the stake, The Vanguard Group, Inc. holds 112,347,939 shares worth 112,347,939. A second-largest stockholder of SWN, BlackRock Fund Advisors, holds 87,537,063 shares, controlling over 7.93% of the firm’s shares. Fidelity Management & Research Co is the third largest shareholder in SWN, holding 75,333,561 shares or 6.83% stake. With a 4.56% stake in SWN, the Fidelity Low Priced Stock Fund is the largest stakeholder. A total of 50,300,594 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 3.09% of SWN stock, is the second-largest Mutual Fund holder. It holds 34,047,615 shares valued at 199.18 million. Vanguard Total Stock Market Index holds 3.04% of the stake in SWN, owning 33,577,797 shares worth 196.43 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SWN since 24 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SWN analysts setting a high price target of $17.50 and a low target of $6.00, the average target price over the next 12 months is $9.80. Based on these targets, SWN could surge 208.64% to reach the target high and rise by 5.82% to reach the target low. Reaching the average price target will result in a growth of 72.84% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SWN will report FY 2022 earnings on 02/23/2024. Analysts have provided yearly estimates in a range of $1.39 being high and $1.26 being low. For SWN, this leads to a yearly average estimate of $1.32. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Southwestern Energy Company surprised analysts by $0.02 when it reported $0.32 EPS against a consensus estimate of $0.30. The surprise factor in the prior quarter was -$0.00. Based on analyst estimates, the high estimate for the next quarter is $0.33 and the low estimate is $0.20. The average estimate for the next quarter is thus $0.27.

Summary of Insider Activity:

Insiders traded SWN stock several times over the past three months with 0 Buys and 1 Sells. In these transactions, 0 shares were bought while 33,800 shares were sold. The number of buy transactions has increased to 55 while that of sell transactions has risen to 49 over the past year. The total number of shares bought during that period was 4,060,086 while 2,573,093 shares were sold.

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