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Investing.com -- UBS has identified leading stocks in the oil and gas emerging opportunities sector, highlighting companies positioned to benefit from digital transformation, power generation demand, and regional activity improvements.
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The investment bank’s analysis focuses on firms with specific growth catalysts and operational advantages that could drive performance in the evolving energy landscape.
1. SLB (NYSE:SLB) - UBS views execution of the Digital growth story, CHX integration, improving AI hardware growth, and returning Saudi activity as key drivers for SLB. The firm continues to see SLB’s new Digital unit supporting re-rating potential for the stock.
Recently, SLB secured a three-year agreement with Azule Energy to expand the use of its Delfi digital platform and, through its OneSubsea joint venture, won a contract to supply a high-pressure boosting system in the Gulf of America.
2. Liberty Energy (NYSE:LBRT) - One potential longer term challenge to increased PowerGen consumption could be supply chain bottlenecks, as lead times for key gas power plant equipment, including gas turbines (CCGT), transformers, and switching gears, has become extended. UBS sees this supportive of its positive outlook on LBRT, as its capacity of recip engines is estimated to grow by 1GW by year-end 2027, with the vast majority already ordered through existing OEM relationships.
Liberty Energy received an upgrade to Buy from Neutral by BofA Securities and announced the pricing of a $475 million convertible senior notes offering.
3. National Energy Services Reunited Corp (NASDAQ:NESR) - The company rounds out UBS’s top picks in the oil and gas emerging opportunities sector.
National Energy Services Reunited Corp reported fourth-quarter revenue of $398.3 million, a 15.9% year-over-year increase, and also announced it secured multi-year cementing contracts valued at approximately $300 million.
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