Premier Oil earnings – can the share price keep rallying?

Premier Oil’s recovery has a long way to go, as does its repair of the balance sheet. But rising oil demand offers the hope of a brighter year ahead.

When does Premier Oil report earnings?

Premier Oil reports earnings for its 2020 financial year on 18 March.

Premier Oil earnings – what does the City expect?

Premier Oil is forecast to report a headline loss per share of 58.1 cents, while revenue is expected to decline 35.6% to $1.02 billion.

Oil companies are of course tethered to the oil price. Premier Oil has suffered as a result of the gyrations in crude last year, but has now nearly tripled from the low of November last year as the oil price rebound gathered pace. Continued price rises will underpin a more bullish outlook for the stock, although Premier Oil’s huge debt pile may deter investors. Its merger with Chrysaor may well help to turn the firm around and provide it with better financials, but it is still a long road ahead for Premier.

For now, the outlook is better thanks to the recovery in oil demand, but the price will also be influenced by the supply outlook which may become less bullish as producers bolster their output to take advantage of higher prices.

How to trade Premier Oil earnings

The average move on results day for Premier Oil shares is 5.4%. Meanwhile, the eight analysts covering the stock have one ‘buy’ rating, six ‘holds’ and one ‘sell’, with a median target price of 27.6p as opposed to the 12 March closing price of 30.61p.

Premier Oil share price – technical analysis

It has been a year of downs and ups for Premier Oil. After rebounding from the March low it hit resistance at 54p and then slumped to a new low at 10.8p.

Since then it has rebounded impressively, although late November to late January saw an extended consolidation as the price battled around trendline resistance. From the end of January it has surged once again, returning to the 31p area that has marked such a key period of resistance over the last 12 months.

High debt clouds outlook

Premier Oil will have to spend an extended period rebuilding its balance sheet, and will have to hope that rebound in oil demand will continue into the rest of 2021. The shares have enjoyed a good rally from the 2020 lows, remaining in an uptrend since November, but there is still a long way to go to recover the losses of early 2020.

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