3 Energy Stocks Poised to Outshine Earnings Estimates in Q3

We have reached the middle of the third-quarter earnings season, with several energy giants yet to report results. Since the energy business environment was favorable in the September quarter, Comstock Resources Inc. CRK, Williams WMB and Marathon Petroleum Corp. MPC are likely to report better-than-expected earnings. 

How Oil & Gas Prices Behave in Q3?

To have an idea of how oil and natural gas prices behave in the September quarter, let's analyze the commodity prices from the data provided by the U.S. Energy Information Administration (“EIA”). The average Cushing, OK, WTI spot prices for July, August and September of this year were $68.39 per barrel, $64.86 per barrel and $63.96 per barrel, respectively, per EIA data. Commodity prices were $63.54 per barrel, $62.17 per barrel and $68.17 per barrel, respectively, in April, May and June, according to the EIA. Thus, in the first two months of the third quarter of 2025, the oil pricing environment was healthier sequentially.

However, the pricing environment was healthier in the year-ago months. Per EIA data, the average commodity prices were $81.80 per barrel, $76.68 per barrel and $70.24 per barrel, respectively, in July, August and September of 2024.

Given the backdrop, the third-quarter 2025 pricing environment was favorable for exploration and production activities, since the breakeven price in the shale resources is much lower.

For natural gas, the prices were higher than in the September quarter of 2024. According to EIA data, the Henry Hub average natural gas spot prices for July, August and September were $3.20 per million Btu, $2.91 per million Btu and $2.97 per million Btu, respectively, significantly higher than $2.07 per million Btu, $1.99 per million Btu and $2.28 per million Btu in year-ago months.

How to Pick the Right Stocks?

Given the backdrop, it is by no means an easy task for investors to arrive at picks that have the potential to deliver better-than-expected earnings from the vast universe of energy stocks.

While there is no fool-proof method of picking outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks that have high chances of delivering a surprise in their upcoming earnings announcement. Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%.

The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Our Choices

Comstock Resources, a leading producer of natural gas, is likely to have benefited from a favorable commodity pricing scenario.

Comstock Resourceshas an Earnings ESP of +2.86% and currently carries a Zacks Rank #3. It is scheduled to release its third-quarter results on Nov. 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Comstock Resources, Inc. Price and EPS Surprise

Comstock Resources, Inc. price-eps-surprise | Comstock Resources, Inc. Quote

Williams is a well-known name in the midstream business space and is expected to have benefited from stable cash flows generated from its vast pipeline network. Higher natural gas prices are likely to have backed upstream activities, which is expected to have aided WMB’s transportation operations. The firm, scheduled to report earnings on Nov. 3, has an Earnings ESP of +0.56% and a Zacks Rank of 3.

Williams Companies, Inc. Price and EPS Surprise

Williams Companies, Inc. (The) price-eps-surprise | Williams Companies, Inc. (The) Quote

Marathon Petroleum is aleading refiner. The company is likely to have gained from year-over-year lower oil prices.  The firm, scheduled to release third-quarter earnings on Nov. 4, has an Earnings ESP of +8.68% and a Zacks Rank #3.

Marathon Petroleum Corporation Price and EPS Surprise

Marathon Petroleum Corporation price-eps-surprise | Marathon Petroleum Corporation Quote

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This article originally published on Zacks Investment Research (zacks.com).

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