It may be time to start looking at investment options among oil and energy stocks with crude prices surging over the last month and remaining over $80 a barrel despite today’s -2% dip.
Crude oil prices have been in an upward trend since June as Saudi Arabia has cut production in an effort to increase demand. On Tuesday, the U.S. Energy Information Administration (EIA) said it expects this to continue putting upward pressure on oil prices in the coming months.
With that being said, here are three highly-ranked Zacks Oils and Energy sector stocks that look poised to benefit.
CVR Energy CVI: Among its petroleum business, CVR Energy has a full-coking sour crude refinery along with a crude oil gathering system and currently boasts a Zacks Rank #1 (Strong Buy).
Notably, CVR Energy’s operations are not solely reliant on the value of crude oil as the company refines other high-value transportation fuels and produces ammonia fertilizers.
Still, higher crude oil prices are giving the company a boost with earnings estimates soaring over the last 60 days. This is also supportive of CVR Energy’s attractive P/E valuation at 7.9X forward earnings which is roughly on par with its industry average and intriguingly below the S&P 500’s 20.9X.
Global Partners GLP: Also coveting a Zacks Rank #1 (Strong Buy) is Global Partners which owns one of the largest terminal networks of refined petroleum products on the east coast.
While fiscal 2023 earnings estimates have dipped in the last week they still remain higher over the last month with FY24 EPS estimates continuing to rise. Intriguingly, FY24 earnings estimates have risen 7% in the last month to $3.69 per share compared to estimates of $3.44 a share 30 days ago.
Global Partner’s price-to-earnings valuation is very intriguing as well. Trading at 8X forward earnings, shares of GLP offer a nice discount to its own industry average of 11.6X and trade attractively beneath the benchmark.
Murphy USA MUSA: With a Zacks Rank #2 (Buy) Murphy USA’s stock is starting to stand out as well as a leading independent retailer of motor fuel and convenience merchandise in the United States.
The trend of earnings estimate revisions is very positive over the last three months with fiscal 2023 and FY24 EPS estimates now rising 11% and 10% respectively.
Annual earnings are now projected at $20.98 per share in FY23 and this is compelling as Murphy’s stock trades reasonably at 14.6X forward earnings. Considering the company’s massive earnings potential this is not drastically above its industry average of 6.7X and nicely beneath the benchmark’s 20.9X.
Bottom Line
With crude oil prices rising sharply over the last month, these Zacks Oils & Energy sector stocks should benefit. Rising earnings estimates are indicative of such and CVR Energy, Global Partners, and Murphy USA stock are even more compelling considering their attractive price-to-earnings valuations.
CVR Energy Inc. (CVI): Free Stock Analysis Report
Murphy USA Inc. (MUSA): Free Stock Analysis Report
Global Partners LP (GLP): Free Stock Analysis Report
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