Bull of the Day: Permian Resources (PR)

Remaining the best-performing sector in 2026, the shift in investor interest toward the energy sector has gained steam with the war in Iran catapulting crude oil prices to over $100 a barrel amid production disruptions in the Middle East.                                                                      

Being added to the Zacks Rank #1 (Strong Buy) list this week, Permian Resources Corporation PR) is a stock among the energy sector that looks poised for new highs as an independent oil and gas company formed through the consolidation of Colgate Energy in 2022 and Earthstone Energy in 2023.

PR Stock Performance Overview

Trading at a 52-week high of $21 a share, Permian Resources stock is drawing attention as it has highly lucrative oil exploration and production operations in the Permian Basin, specifically concentrated in the core of the Delaware sub-basin, which is considered one of the lowest-cost, highest-return oil regions in North America.

Strong buy-side sentiment among analysts, rising oil prices, and Permian Resources' low-cost production profile have all contributed to sustained momentum. PR shares have soared over 50% year to date, topping the broader Zacks Oil-Energy Market’s 32%, while the benchmark S&P 500 has now fallen 7%.

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PR Receives Investment-Grade Credit Rating

Notably, Permian Resources was recently upgraded to investment grade (IG) by S&P Global Ratings.

Being upgraded to investment grade means a company or bond issuer is now considered low-risk by major credit rating agencies such as S&P, Moody’s, or Fitch, signaling strong financial health and a high likelihood of repaying its debts.

Most importantly, this lowers borrowing costs while attracting institutional investors who require IG-rated issuers, and can also serve as a major catalyst for valuation expansion.

PR Excels in a Supportive Oil Market 

Of course, the macro backdrop adding fuel to the rally is that with oil prices remaining elevated, Permian Resources is highly leveraged to Permian Basin production economics.

Rising or stable crude prices amplify the company’s cash flow, with low-cost operators like Permian Resources likely to outperform peers in these conditions. To that point, Permian Resources reported record free cash flow in its most recent Q4 results in late February, including $404 million in adjusted free cash flow, the highest Q4 level in its history.

Furthermore, Q4 EPS of $0.37 crushed expectations of $0.28 by 32% and was up from $0.36 per share a year ago.  

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Positive EPS Revisions & Steady Growth  

Attributing to its strong buy rating is that Permian Resources' FY26 and FY27 EPS estimates have continued to trend higher over the last 60 days, spiking 53% and 41% from estimates of $0.98 and $1.21 per share, respectively.

Permian Resources' EPS is now expected to be up 5% this year to $1.50 and is projected to rise another 14% in FY27 to $1.71. 

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This is supported by steady top line expansion, with high single-digit growth in the forecast in this regard as annual sales projections edge closer to $6 billion.

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PR’s Dividend Growth

Dividend increases often signal management confidence and attract income-focused investors, and Permian Resources recently raised its quarterly dividend to $0.16 from $0.15.

Although it’s a slight uptick, Permian Resources offers a competitive yield while still investing in its growth. Furthermore, PR shares now have an annualized dividend growth rate of 62.73% in the last five years, with a current yield that’s edging toward 3%.

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Bottom Line

Trading at a reasonable 14X forward earnings multiple, Permian Resources' stock looks attractive right now because analysts overwhelmingly rate it a Buy, the company is delivering strong operational momentum, and its Delaware Basin assets continue to generate high-return production that supports future growth. Recent upgrades, strong price performance, and rising earnings estimates all reinforce the bullish setup.

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This article originally published on Zacks Investment Research (zacks.com).

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