Rising EPS & Strong Natural Gas Prices: 3 Stocks to Buy Now
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After surging more than twofold over the past year, natural gas prices are poised to maintain their momentum in 2025. A combination of cold weather, supply constraints, and strong global demand has kept prices elevated, with Europe and the United States experiencing record withdrawals from storage during winter. As production remains relatively flat and liquefied natural gas (“LNG”) exports increase, the supply-demand imbalance could extend into 2025, supporting prices.For investors looking to gain exposure to the bullish natural gas market, Antero Resources (AR), Coterra Energy CTRA and Gulfport Energy (GPORAR) and present compelling opportunities. These companies are well-positioned to benefit from higher prices, increased drilling activity, and growing LNG exports. Additionally, all three are experiencing upward revisions to their 2025 EPS estimates, reflecting improving fundamentals and strong earnings potential.Bullish Drivers: Supply Constraints and Strong DemandNatural gas markets tightened in 2024, driven by a mix of severe winter conditions and limited production growth. The United States saw multiple Arctic cold snaps that boosted heating demand while simultaneously leading to freeze-offs in key producing regions like the Permian and Appalachia. These disruptions caused a significant drawdown in storage levels, with working gas stocks 5% below the five-year average by late February 2025.Europe is facing an even more severe supply crunch. With Russian gas transit through Ukraine halted on Jan. 1, 2025, the continent is now more reliant on LNG imports, primarily from the United States. As of late February, EU gas storage levels were just 40% full compared to 60% at the same time in 2024. This sharp depletion means that Europe will need to import much higher volumes of LNG throughout 2025 to prepare for next winter, keeping global natural gas markets tight.LNG Exports Driving Market StrengthOne of the biggest factors supporting higher natural gas prices is the surge in LNG exports. The United States has emerged as the world’s largest LNG supplier, with exports averaging 16 billion cubic feet per day (Bcf/d)—a record high. European and Asian buyers continue to absorb American LNG cargoes, pushing domestic supply lower and reinforcing price strength.The International Energy Agency (IEA) has warned that Europe will need significantly more LNG imports in 2025 to meet storage targets, further tightening global supply. Additionally, U.S. LNG export capacity is set to expand, with new projects expected to increase shipments in late 2025 and early 2026. This long-term growth in exports could keep domestic supply constrained, adding upward pressure to prices.Production Rebounds But Producers Remain CautiousDespite higher prices, U.S. natural gas producers are taking a measured approach to ramping up output. After a temporary dip in February due to freeze-offs, production rebounded to 105 Bcf/d by late February 2025, with further increases expected into March. However, many major producers have signaled that they will keep output relatively flat in early 2025, only considering gradual increases later in the year. While this does suggest modest production growth, it also highlights producers' commitment to capital discipline, which could help prevent an oversupply situation.A Bullish OutlookHeading into the summer of 2025, storage injections will be a key focus. The EIA expects U.S. inventories to be 4% below the five-year average at the end of the withdrawal season in March, providing continued support to prices. Additionally, with summer demand for electricity rising and LNG exports maintaining record levels, natural gas prices are expected to stay close to $4/MMBtu in the near term.3 Stocks to BuyAntero Resources: It is one of the leading natural gas producers in the United States. Antero Resources has more than two decades of premium low-cost drilling inventory in the prolific Appalachian Basin, indicating a strong production outlook. AR churned out 316 billion cubic feet equivalent (Bcfe) in the most recent quarter, of which more than 60% was natural gas.The Zacks Consensus Estimate for Antero Resources’ 2025 earnings per share indicates an astounding 1,381% year-over-year growth. Over the past 60 days, the Zacks Rank #1 (Strong Buy) AR has seen its 2025 EPS projection move up around 14.3%.You can see the complete list of today’s Zacks #1 Rank stocks here.Coterra Energy: It is an independent upstream operator primarily engaged in the exploration, development and production of natural gas. Headquartered in Houston, TX, the firm owns some 183,000 net acres in the gas-producing Marcellus Shale of the Appalachian Basin. The Zacks Rank #2 (Buy) company’s share of natural gas in its overall production is around 65%.Coterra’s expected earnings per share growth rate for three to five years is currently 15.5%, which compares favorably with the industry's growth rate of 12.3%. Valued at around $20.6 billion, the Zacks Consensus Estimate for CTRA’s 2025 earnings has moved up around 18.6% over the past 60 days.Gulfport Energy: Gulfport Energy is a natural gas-focused exploration and production company headquartered in Oklahoma City, OK. Operating primarily in the Utica Shale in Ohio and the SCOOP play in Oklahoma, Gulfport has emerged from bankruptcy with a stronger balance sheet and a free cash flow-oriented strategy. With more than 90% natural gas production, the company prioritizes Utica development to drive free cash flow, reduce debt and align with ESG-focused investor expectations.The Zacks Consensus Estimate for Gulfport Energy’s 2025 earnings per share indicates 42.4% year-over-year growth. This Zacks Rank #2 firm has a Growth Score of B. Over the past 60 days, the Zacks Consensus Estimate for GPOR’s 2025 earnings has moved up around 6.4%.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Gulfport Energy Corporation (GPOR): Free Stock Analysis Report Antero Resources Corporation (AR): Free Stock Analysis Report Coterra Energy Inc. (CTRA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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