From soaring commodity prices to the “multi-billion dollar” hydrogen opportunity, analysts at Morgan Stanley and Bernstein name their top stocks to navigate the booming energy sector. The sector has been one of the few bright spots in a year when the broader stock market has taken a severe beating. Energy is one of just two sectors on the S & P 500 that are in positive territory this year, Bank of America said —up 56% year to date. And the bank is advising investors to “stay long” the sector. “Our commodity strategists expect that a sharp contraction in Russian oil exports could trigger a full-blown 1980s-style oil crisis … pushing Brent well past $150/barrel, up from the current [price of around] $120/barrel,” Bank of America’s strategists, led by Savita Subramanian, said on Jun. 1. “With China reopening, peak driving season, and favorable positioning/valuations, we see more upside.” The sector has benefited from soaring crude oil prices this year amid a rebound in consumption and supply disruptions as a result of Russia’s invasion of Ukraine. Gasoline prices, meanwhile, have also hit record highs. Morgan Stanley noted that Asian energy producers are benefitting from this, producing more gas compared to their global peers. This growth is supported by rising domestic gas prices in India, Thailand and other parts of Asia, the bank’s analysts, led by Mayank Maheshwari, said on Jun.6. It’s top overweight-rated picks in this space include Australia’s Woodside Energy , Thailand’s PTT Exploration and Production and China National Offshore Oil Corporation . The bank noted that Woodside’s “strong balance sheet” gives the company the flexibility to fund growth, distribute excess capital and prepare for the energy transition. The bank has a price target of 40 Australian dollars ($28.80) on Woodside, which closed at around 32.90 Australian dollars on Jun. 7 — an implied upside of 21.6%. Morgan Stanley also likes PTT Exploration and Exploration for its “good…
2022-06-07 21:51:00
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