Granite Ridge Resources, Inc. (GRNT) Surges 6.7%: Is This an Indication of Further Gains?

Granite Ridge Resources, Inc. (GRNT) shares soared 6.7% in the last trading session to close at $6.41. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.3% gain over the past four weeks.

On Friday, GRNT moved higher in trading, driven by a sharp rise in oil prices stemming from escalating geopolitical tensions in the Middle East, particularly the conflict between Israel and Iran and potential U.S. military involvement. Fears of supply disruptions and a possible closure of the Strait of Hormuz - a strategic passageway for nearly 20% of global oil shipments - have sent crude prices to five-month highs. Since the conflict intensified, Brent crude has risen 13%, while West Texas Intermediate (WTI) is up 10%. As a non-operated oil and natural gas exploration and production company with a diverse portfolio of wells and acreage across prolific U.S. basins - including the Permian, Eagle Ford, Bakken, Haynesville, and DJ—Granite Ridge is well positioned to benefit from the upswing in commodity prices. Higher oil prices directly support stronger revenues and improved profitability for the company. Investor confidence was further reinforced by Granite Ridge’s stable operational footing and sound financial position, which the company recently reaffirmed during a leadership transition. Based in Dallas, Texas, Granite Ridge’s asset-light model allows it to scale exposure to high-performing assets while maintaining operational flexibility—a strategy that appears increasingly attractive in a volatile macro environment.

This company is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of +30.8%. Revenues are expected to be $111 million, up 22.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Granite Ridge Resources, Inc., the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GRNT 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 >>>>

Granite Ridge Resources, Inc. is a member of the Zacks Oil and Gas - Exploration and Production - United States industry. One other stock in the same industry, California Resources Corporation (CRC), finished the last trading session 1.2% higher at $46.61. CRC has returned 9% over the past month.

For California Resources, the consensus EPS estimate for the upcoming report has changed +5.9% over the past month to $0.90. This represents a change of +50% from what the company reported a year ago. California Resources currently has a Zacks Rank of #3 (Hold).

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

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