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Will Chesapeake Energy's 4Q17 Earnings Impact Its Stock?

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Part 3
Will Chesapeake Energy's 4Q17 Earnings Impact Its Stock? PART 3 OF 5

What to Expect from Chesapeake Energy’s Stock Performance

Stock performance

Chesapeake Energy (CHK) stock has been on a downtrend recently. Several US stocks including Chesapeake Energy plunged last week after rising bond yields hinted at inflation. The ten-year US bond yield hit a four-year high. The US payrolls report, which showed wages growing faster than expected, also aggravated inflation fears and concerns that interest rates would rise faster than expected.

On a year-over-year basis, Chesapeake Energy has fallen 55.3%.

What to Expect from Chesapeake Energy’s Stock Performance

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As we noted above, Chesapeake Energy stock has mainly been tracking movements in natural gas prices and crude oil.

Crude oil prices have increased ~12% YoY (year-over-year), while natural gas prices have declined ~15% during the same period.

Chesapeake Energy has underperformed the broader energy sector or the Energy Select Sector SPDR ETF (XLE), which has decreased approximately -8.4% YoY.

Chesapeake Energy also underperformed the broader market or the S&P 500 ETF (SPY), which rose ~14% during the same period. The energy sector accounts for ~6.0% of SPY.

What to expect after Chesapeake Energy’s earnings

Investors will be looking to see how upcoming earnings could impact Chesapeake Energy stock. Following a dip in 3Q17 production (on an annual basis) after Hurricane Harvey, the production expectations for 4Q17 are relatively higher. Oil volumes in 4Q17 are expected to average ~100,000 bpd (barrels per day)—compared to production of 86,000 bpd in 3Q17. Chesapeake Energy expects that its heavy turn-in-line schedule could dominate its fourth quarter volumes in the Eagle Ford.

Chesapeake Energy is expected to release its 4Q17 earnings on February 22.

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