December 28, 2023
Top 10 Stock Coterra Energy Hold Recommendation

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For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View Coterra Energy Hold

360 METRICS	December 28, 2023
VALUE
VALUE	35
GROWTH
GROWTH	35
SAFETY
SAFETY	88
SENTIMENT
SENTIMENT	44
360° VIEW
360° VIEW	44

ANALYSIS: With an Obermatt 360° View of 44 (better than 44% compared with alternatives), overall professional sentiment and financial characteristics for the stock Coterra Energy are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Coterra Energy. The only rank that is above average is the consolidated Safety Rank at 88, which means that the company has a financing structure that is safer than those of 88% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 35, which means that the share price of Coterra Energy is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 35, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 44, which means that professional investors are more pessimistic about the stock than for 56% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more

RECOMMENDATION: With a consolidated 360° View of 44, Coterra Energy is worse than 56% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 44. The negative market view on Coterra Energy may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for Coterra Energy only reserved

SENTIMENT METRICS	December 28, 2023
ANALYST OPINION
ANALYST OPINION	38
OPINIONS CHANGE
OPINIONS CHANGE	34
PRO HOLDINGS
PRO HOLDINGS	66
MARKET PULSE
MARKET PULSE	60
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	44

ANALYSIS: With an Obermatt Sentiment Rank of 44 (better than 44% compared with alternatives), overall professional sentiment and engagement for the stock Coterra Energy is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Coterra Energy. Analyst Opinions are at a rank of 38 (worse than 62% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 34, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 66, which means that professional investors hold more stock in this company than in 66% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 60, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 60% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Coterra Energy and the professional news channels are on the positive side. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 44 (less encouraging than 56% compared with investment alternatives), Coterra Energy has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more

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Value Strategy: Coterra Energy Stock Price Value below-average critical

VALUE METRICS	December 28, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	15
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	26
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	52
DIVIDEND YIELD
DIVIDEND YIELD	69
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	35

ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Coterra Energy shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Coterra Energy. Expected dividend yields are higher than for 69% of comparable companies (a Dividend Yield rank of 69), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 15 which means that the stock price compared with what market professionals expect for future profits is higher than for 85% of comparable companies, indicating a low value concerning Coterra Energy's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Coterra Energy with a rank of 26. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 74% of comparable companies, indicating a low value concerning Coterra Energy's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a hold recommendation based on Coterra Energy's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Coterra Energy may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more

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Growth Strategy: Coterra Energy Growth Momentum low

GROWTH METRICS	December 28, 2023
REVENUE GROWTH
REVENUE GROWTH	39
PROFIT GROWTH
PROFIT GROWTH	41
CAPITAL GROWTH
CAPITAL GROWTH	27
STOCK RETURNS
STOCK RETURNS	71
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	35

ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Coterra Energy shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Coterra Energy. Sales Growth has a below market rank of 39, which means that, currently, professionals expect the company to grow less than 61% of its competitors. The same is valid for Capital Growth, with a rank of 27, and Profit Growth, with a rank of 41. Currently, professionals expect the company to grow its profits less than 59% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 71, which means that the stock returns have recently been above 71% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Coterra Energy, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more

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Safety Strategy: Coterra Energy Debt Financing Safety very solid

SAFETY METRICS	December 28, 2023
LEVERAGE
LEVERAGE	80
REFINANCING
REFINANCING	72
LIQUIDITY
LIQUIDITY	83
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	88

ANALYSIS: With an Obermatt Safety Rank of 88 (better than 88% compared with alternatives) for 2023, the company Coterra Energy has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Coterra Energy is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Coterra Energy. Leverage is at 80, meaning the company has a below-average debt-to-equity ratio. It has less debt than 80% of its competitors. Refinancing is at a rank of 72, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 72% of its competitors. Finally, Liquidity is also good at a rank of 83, which means that the company generates more profit to service its debt than 83% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 88 (better than 88% compared with alternatives), Coterra Energy has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more

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Combined financial peformance: Coterra Energy Below-Average Financial Performance

COMBINED PERFORMANCE	December 28, 2023
VALUE
VALUE	35
GROWTH
GROWTH	35
SAFETY
SAFETY	83
COMBINED
COMBINED	48

ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), Coterra Energy (Oil & Gas Production, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Coterra Energy are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives) and show below-average growth (Growth Rank of 35) but are safely financed (Safety Rank of 88), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on Coterra Energy's financial characteristics. As the company Coterra Energy's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 35) and low growth (Obermatt Growth Rank of 35), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 88) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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