Whiting Petroleum Corp. (WLL) continues to reap big profits from higher energy prices. The company’s recently reported second-quarter results were awesome, analysts are projecting strong earnings growth into the next-year period and its share price is trading at a big discount to the overall market.

Whiting Petroleum Corp. engages in the exploration and production of oil and gas in the United States. The company was founded in 1983, has a market cap of $3.57 billion and is headquartered in Denver, Colorado.

Industry Trend

Energy stocks have traded lower over the last 2 months in reaction to oil prices dropping from $147 a barrel to current prices around $110 a barrel. This has provided some much desired relief to consumers, but on a historical basis, oil prices are still incredibly high, and that continues to produce big-time earnings for oil companies. This dynamic was evident when Whiting reported record-setting second-quarter results on July 31.

Second-Quarter Results

Revenue was up 84% from the same period last year to $354.8 million. Net income totaled $80.4 million, an amazing increase of more than 200% from last year. This produced earnings of $1.90 per share, slightly below analyst estimates but still very impressive none-the-less.

In spite of the recent small miss, Whiting does have a strong history of surprising and beating analyst estimates. Over the last four quarters, Whiting has beaten by an average of 6 cents, or 7%.

Whiting noted that its impressive results were driven by increased production and higher selling prices.

Analyst Estimates

In response to a bullish energy environment, analysts have continued to raise their earnings projections for Whiting. The current-year estimate has advanced to $8.25 per share from $7.93 per share 30 days ago. The next-year estimate is bullish as well, pegged at $9.33 per share, a 13% earnings growth projection.

Based upon the current-year estimate, this stock looks seriously undervalued, carrying a forward P/E multiple of just 10X, a steep discount to the overall market.

The Chart

In spite of its recent pullback, this stock is still deep in the green on the year. A long-term trend line is currently being pressured and looks well positioned to provide support. Take a look at the chart below.

“WLL” Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

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