Please ensure Javascript is enabled for purposes of website accessibility

Why Matador Resources Stock Surged 20% in May

By Matthew DiLallo – Updated Jun 8, 2020 at 8:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Two catalysts fueled the oil stock last month.

What happened

Shares of Matador Resources (MTDR 6.76%) soared 20.8% in May, according to data provided by S&P Global Market Intelligence. Fueling the rally in the oil stock was a historic rebound in oil prices and a bullish analyst note.  

So what

In early May, an analyst at Imperial Capital raised their price target on Matador's stock from $6 per share to $11 per share. Imperial also maintained its outperform rating. One factor fueling that bullish view was Matador's stronger-than-expected first-quarter results, which it reported in late April. Imperial also has an optimistic outlook, believing that the oil producer will deliver better midstream and upstream results in 2020 and 2021. 

An oil pump with a sunny sky in the background.

Image source: Getty Images.

Matador also benefited from a monster rebound in oil prices last month. WTI, the main U.S. oil price benchmark, zoomed 88% on the month, its biggest rise in history. Several factors fueled that historic rebound, including fading concerns that the U.S. would run out of storage space as supplies declined and demand started rebounding. 

Now what

The outlook for the oil market has improved considerably over the past several weeks. Demand has snapped back as governments lifted restrictions on travel and non-essential businesses. Meanwhile, supplies have fallen due to production curtailments by OPEC and others. That improvement appears poised to continue now that OPEC has extended its initial output cuts through the end of next month. That catalyst should push crude prices up even higher, which could give Matador's stock the fuel to keep rallying.

Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Matador Resources Company Stock Quote
Matador Resources Company
MTDR
$57.46 (6.76%) $3.64

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.