Strength Seen in Helix Energy: Can Its 5.5% Jump Turn Into More Strength?

Helix Energy HLX shares ended the last trading session 5.5% higher at $10.80. 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 10.7% loss over the past four weeks.

The surge can be attributed to a higher demand for Helix Energy's oilfield services, especially in key offshore markets like the U.S. Gulf of Mexico, the U.S. East Coast, and Brazil, among others. The company's Well Intervention segment specializes in prolonging the lives of existing wells, thereby reducing the need for drilling new wells. Currently, even though the commodity pricing scenario remains favorable for exploration and production activities, there has been a slowdown in drilling activities as upstream players are prioritizing stockholder returns rather than boosting output. By prolonging the life of existing wells through its services, Helix helps in optimizing the production from existing wells, thereby enabling companies to extract more value from their existing resources. This has been a significant growth driver for the company.

This offshore oil and gas services contractor is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents a year-over-year change of +10.5%. Revenues are expected to be $343.74 million, down 13.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Helix Energy, the consensus EPS estimate for the quarter has been revised 16.7% 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 HLX 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 >>>>

Helix Energy belongs to the Zacks Oil and Gas - Field Services industry. Another stock from the same industry, Subsea 7 SA (SUBCY), closed the last trading session 1.2% higher at $16.20. Over the past month, SUBCY has returned -11.4%.

For Subsea 7, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.29. This represents a change of +163.6% from what the company reported a year ago. Subsea 7 currently has a Zacks Rank of #3 (Hold).

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