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Vaccine News Lifts Energy Stocks Higher: 5 Stocks to Watch

Zacks Equity Research
·4 min read

Energy stocks made a comeback on the back of promising developments with respect to the COVID-19 vaccine. Per a press release issued by Pfizer Inc. PFE and BioNTech SE BNTX on Nov 9, the mRNA-based BNT162b2 “vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants.”

The companies are going to seek approval for an Emergency Use Authorization from the FDA to start distribution. They expect to file for the approval following the release of a safety milestone data as early as in the third week of November. The announcement came as a breath of fresh air with regards to economic recovery.

Businesses can resume and every activity which has been hit by the lockdown will have a chance to go back to normal. Notably, sectors like energy stand to benefit from such news as activities involving travel will gradually normalize. Notably, the S&P 500 Energy Select Sector SPDR (XLE) popped 3.2% on Nov 10 on the back of the positive news related to vaccine.

Moreover, the American Petroleum Institute also reported that U.S. crude supplies for the week ended Nov 6, declined by 5.1 million barrels per day, as quoted in a MarketWatch article. This signals a rise in demand as the economy gradually opens up. Oil prices have also seen an uptick recently owing largely to declining crude inventories with the vaccine trial news providing further aid.

Meanwhile, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman also provided more positive news in a recent press conference. He said that crude output cuts could be adjusted once a consensus was reached among the members of the Organization of Petroleum Exporting Countries (“OPEC”), Russia and other crude producing countries, collectively known as OPEC+, as quoted in a Reuters article. A consistent output cut would give more pricing power to producers which, in turn, would drive oil prices higher.

5 Stocks to Watch

As vaccine news boosts energy shares and oil prices spurt, investing in solid oil explorers and producers to pipeline owners and rig operators seems prudent. Here’re five such stocks to keep an eye on that carry Zacks Rank#1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

PDC Energy, Inc. PDCE explores, produces crude oil, natural gas and natural gas liquids in the United States. The company, currently, has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased more than 100% over the past 60 days. The company’s expected earnings growth rate for the current year is 32.5%.

Oasis Petroleum Inc. OASPQ acquires and develops onshore unconventional oil and natural gas resources in the United States. The company, currently, has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 92.9% over the past 60 days. The company’s expected earnings growth rate for the current year is over 100%.

Matador Resources Company MTDR explores, produces, develops and acquires oil and natural gas resources in the United States. The company, currently, has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased over 100% over the past 60 days. The company’s expected earnings growth rate for the next year is over 100%.

Cabot Oil and Gas Corporation COG explores for, exploits, develops, produces and markets oil and gas properties in the United States. The company, currently, has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 12.1% over the past 60 days. The company’s expected earnings growth rate for the next year is over 100%.

Continental Resources, Inc. CLR explores for, develops and produces crude oil and natural gas properties in the United States. The company, currently, has a Zacks Rank #3. The Zacks Consensus Estimate for its next-year earnings increased 100% over the past 30 days. The company’s expected earnings growth rate for the next 5 years is 8.5%.

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Cabot Oil Gas Corporation (COG) : Free Stock Analysis Report
 
Pfizer Inc. (PFE) : Free Stock Analysis Report
 
PDC Energy, Inc. (PDCE) : Free Stock Analysis Report
 
Continental Resources, Inc. (CLR) : Free Stock Analysis Report
 
Matador Resources Company (MTDR) : Free Stock Analysis Report
 
BioNTech SE Sponsored ADR (BNTX) : Free Stock Analysis Report
 
Oasis Petroleum Inc. (OASPQ) : Free Stock Analysis Report
 
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