Key Insights
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Energy stock rally continues despite the pullback in the oil markets.
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Natural gas and coal look strong as sanctions on Russia disrupt markets.
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Many stocks in this segment have already enjoyed strong moves, but they have a good chance to develop additional upside momentum.
While WTI oil has recently pulled back below the $100 level amid fears about the negative impact of coronavirus lockdowns in China and the release of strategic reserves, energy investors remain focused on the big picture. Geopolitical tensions continue to push energy prices higher, and energy-related stocks remain in demand. Let’s take a look at the three stocks that would benefit from the continuation of the energy rally.
Exxon Mobil
Exxon Mobil has been criticized for its slow move towards the renewable energy, but the recent developments in energy markets have provided strong support to the stock. Finally, Exxon Mobil stock managed to rebound to levels that were last seen back in 2018.
Analyst estimates are rising fast, and the company is expected to report earnings of $8.71 per share in the current year, so the stock is trading at roughly 10 forward P/E, which looks rather cheap for the current market environment.
Peabody Energy
Coal was expected to slowly leave the scene as the world was shifting to renewables, but the recent events have completely changed the situation for the next few years.
Coal markets are hot, and the stock of the leading coal producer Peabody Energy gained strong upside momentum. Despite the huge rally, Peabody Energy is trading at less than 4 forward P/E for the current year, so the stock would move higher if the situation in the coal markets remains tense.
Chesapeake Energy
Strong coal markets provide support to natural gas markets. In this light, it’s not surprising to see that natural gas prices have just moved above 2021 highs.
This is bullish for Chesapeake Energy , which is trading at 9 forward P/E and has a good chance to develop additional upside momentum in case natural gas prices stay near the current levels.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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