Landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day, Adams Resources & Energy’s AE outlook indicates its stock could continue to plummet.

Engaged in the tank truck transportation of petroleum products and liquid chemicals, Adams Resources has attributed recent struggles to weak freight demand driving down rates, lower drilling activity in its primary basin, and ongoing operational cost inflation.

Profitability Struggles

After recently missing Q2 bottom line expectations earlier in the month, earnings estimate revisions have plummeted for Adams Resources. Notably, Q2 EPS came in at an adjusted loss of -$0.87 compared to the Zacks Consensus of -$0.21 a share.

Following the earnings miss, fiscal 2024 EPS estimates now call for an adjusted loss of -$1.59 compared to estimates of -$0.53 per share seven days ago. While Adams Resources is expected to turn a profit of $0.06 a share in FY25 estimates have dropped 54% from $0.13 per share a week ago.  

Image Source: Zacks Investment Research

Subpar Sales Growth

Unfortunately, Adams Resources' top line trajectory doesn’t provide excitement for its future ability to turn a profit with total sales expected to be virtually flat in FY24 and FY25.

Image Source: Zacks Investment Research

Poor Stock Performance

Correlating with its dismal outlook, Adams Resources’ stock has plummeted -30% year to date to largely underperform the broader indexes.

Furthermore, this has trailed its Zacks Oil and Gas-Refining and Marketing Industry’s +9% with Marathon Petroleum MPC and Murphy USA MUSA being two peers that have soared more than +20% this year.  

Image Source: Zacks Investment Research

Takeaway

There are better options to invest in among the oils and energy sector than Adams Resources as downside risk continues to mount for the marketer and transporter of petroleum products. Investors looking for a rebound could be disappointed and may want to stay on the sidelines for now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Adams Resources & Energy, Inc. (AE) : Free Stock Analysis Report

Murphy USA Inc. (MUSA) : Free Stock Analysis Report

Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research