Permian Resources has spent the year raising its oil target, setting free cash flow records and buying acreage faster than ever, and the stock has noticed. Shares are up about 25% since the last report while the S&P 500 slipped slightly. When the company reports third-quarter results after the close on November 4, the question is less whether the business is healthy and more whether it can keep supplying the upside that investors have already started to pay for.
The Street is looking for earnings of $0.60 a share on revenue of roughly $1.77 billion. Against the year-ago quarter, that is strong growth: EPS up about 62% and revenue up nearly 34%. Sequentially, though, the bar is lower than the record second quarter, which delivered $0.69 a share on $1.86 billion in revenue. That gap matters. A company that just lifted full-year oil guidance for the third straight time, and added production through acquisitions, is being modeled for a softer quarter. If volumes and realizations hold up, that leaves room to clear consensus. If they don't, the step-down may turn out to be warranted.
The oil math is the core test. Management raised its 2026 oil outlook from 189,000 barrels a day in its original plan to 192,500 and then to 199,000, citing higher working interest in new wells (now above 80%) and accelerated workovers. With first-quarter output around 192,000 barrels a day and second-quarter output near 198,000, hitting 199,000 for the full year implies a second-half average somewhat above 200,000. Third-quarter production should therefore move clearly higher, helped by the first full quarter of the $520 million Ward County bolt-on, which closed in July with about 5,000 BOE a day. A print that merely matches the second quarter would raise doubts about the fourth-quarter lift needed to land the guide. A clean step up would validate the claim that the business is running at its best level ever.
Two soft spots from last quarter deserve a close look. The first is natural gas. Negative Waha pricing pushed realized gas prices down to $0.38 per Mcf in the second quarter and forced roughly a 20% sequential curtailment, with wells brought back only in late June. The third quarter will show whether those volumes came back cleanly and how much regional pricing still weighs on results, even though the bigger relief, from long-haul transport capacity covering nearly all net gas volumes, is a 2027 story. The second is costs. Drilling and completion spending held at about $685 per foot, and management described its $675 target as a longer putt because of diesel and casing inflation. Any further drift would put pressure on the roughly $1.95 billion capital budget, which was already raised from $1.85 billion, albeit to fund higher working interest rather than inflation alone.
Capital allocation is the third thread. Roughly $1.05 billion of acquisitions across about 190 deals through midyear already topped the company's full-year pace of 2024 and 2025. Investors will want evidence that the Ward County acreage trade, which lifted operated locations from 50 to 120, is integrating smoothly within the roughly $25 million of extra capex flagged, and that free cash flow stays near the $751 million record despite heavier deal activity, keeping leverage near 0.5 times.
Sentiment has warmed, rising to about 29% bullish from roughly 21% ahead of the last report, and the stock at $25.77 sits within 1% of its post-earnings high and well above its 200-day average near $20. That is a stock testing a breakout, which cuts both ways. The narrative remains intact if Permian Resources shows oil volumes climbing toward a second-half run rate that makes 199,000 barrels a day look conservative, with costs contained and gas back online. Anything that suggests the guidance raises have run their course would be a harder sell at these levels.