4 Integrated Energy Stocks to Watch Amid Industry Challenges

Zacks11-15 21:06

Oil prices, which are still high, continue to weigh on the refining sector, with substantial input costs compressing profit margins. Furthermore, a deceleration in oil production growth is expected to...

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Furthermore, a deceleration in oil production growth is expected to...</p>\n\n<a href=\"https://finance.yahoo.com/news/4-integrated-energy-stocks-watch-130600109.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0320765489.SGD","symbol_name":"FTIF - Franklin Mutual US Value A Acc SGD","start_time":0,"source_url":"https://finance.yahoo.com/news/4-integrated-energy-stocks-watch-130600109.html","article_id":"2483637014","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/Bb3HhzvR12atkV.H1bCxmg--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/f2386bab33b7b86b8371993cc9af867a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2483637014","pubTimestamp":1731675960,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Oil prices, which are still high, continue to weigh on the refining sector, with substantial input costs compressing profit margins. Furthermore, a deceleration in oil production growth is expected to limit earnings from the upstream activities of integrated energy companies. At the same time, the rising demand for renewable energy is adding uncertainty to the prospects of the Zacks Oil and Gas Integrated International industry, creating a bleaker outlook.Among the companies in the industry that will probably survive the business challenges are Chevron Corporation CVX, Shell plc SHEL, BP plc BP andEni SpA E.Slowdown in Production Growth to Hurt Upstream Business: There has been a slowdown in oil production growth in the upstream businesses of integrated energy companies in the United States due to shareholder demands for a greater focus on returning capital rather than investing in production expansion. As production growth slows, output decreases, which can lead to reduced revenues. S","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","LU1066053197.SGD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM3\" (SGDHDG) INC","LU2236285917.USD":"ALLIANZ GLOBAL INCOME \"AMG\" (USD) INC","LU0368265418.SGD":"Blackrock World Energy Fund A2 SGD-H","SDS":"两倍做空标普500ETF","LU0266512127.USD":"摩根大通环球自然资源 A(acc)","UPRO":"三倍做多标普500ETF","BK4592":"伊斯兰概念","BP":"英国石油","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","LU0122376428.USD":"贝莱德世界能源基金A2","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","LU1829250122.USD":"高盛欧洲核心股票组合Acc","BK4566":"资本集团","LU1929549753.HKD":"FRANKLIN INCOME \"A\" (HKD) INC","SSO":"两倍做多标普500ETF","LU0162691827.USD":"BGF US BASIC VALUE \"A4\" INC","SH":"标普500反向ETF","LU1496350502.SGD":"FRANKLIN DIVERSIFIED DYNAMIC \"A\" (SGDHDG) ACC","BK4588":"碎股","SPXU":"三倍做空标普500ETF","BK4550":"红杉资本持仓","CVX":"雪佛龙","IVV":"标普500指数ETF","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","LU0278409577.USD":"MANULIFE GLOBAL FUND-GLOBAL RESOURCES FUND \"AA\" (USD) INC","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","LU0300736062.USD":"FRANKLIN NATURAL RESOURCES \"A\" (USD) ACC",".SPX":"S&P 500 Index","SPY":"标普500ETF","OEX":"标普100","IE00BGHQF524.EUR":"GUINNESS GLOBAL ENERGY \"C\" (EUR) ACC","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","LU0868494708.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) INC","LU0788109394.HKD":"BGF WORLD ENERGY \"A2\" (HKDHGD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","OEF":"标普100指数ETF-iShares","LU0072461881.USD":"BGF US BASIC VALUE \"A2\" ACC","VOO":"Vanguard标普500ETF","E":"埃尼石油","LU2237438978.USD":"Amundi Funds US Pioneer A2 (C) USD","SHEL":"SHELL PLC SPON ADS EACH REPR 2 ORD SHS"},"translate_title":"行业挑战中值得关注的4只综合能源股","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"E":1,"CVX":1,"SHEL":1,"BP":0.9,"VOO":0.74,"SPY":0.74,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,"ESmain":0.6,"IVV":0.6,".SPX":0.6},"content_text":"Oil prices, which are still high, continue to weigh on the refining sector, with substantial input costs compressing profit margins. Furthermore, a deceleration in oil production growth is expected to limit earnings from the upstream activities of integrated energy companies. At the same time, the rising demand for renewable energy is adding uncertainty to the prospects of the Zacks Oil and Gas Integrated International industry, creating a bleaker outlook.Among the companies in the industry that will probably survive the business challenges are Chevron Corporation CVX, Shell plc SHEL, BP plc BP andEni SpA E.\nAbout the Industry\nThe Zacks Oil and Gas Integrated International industry covers companies primarily involved in upstream, midstream and downstream operations. These companies have upstream businesses in the United States (including prolific shale plays and the deepwater Gulf of Mexico), Asia, South America, Africa, Australia and Europe. Midstream operations of energy companies entail transporting oil, natural gas liquids and refined petroleum products. In downstream businesses, the firms buy raw crude to produce refined petroleum products. The companies’ downstream activities involve chemical businesses that manufacture raw materials for making plastics. The integrated players are now gradually focusing on renewables, leading to the energy transition. The firms aim to lower emissions from operations and cut the carbon intensity of the products sold.\n3 Trends Shaping the Future of the Industry\nRefining Business Grapple with Cost Pressures: With oil prices trading above $67 per barrel, integrated energy companies are experiencing substantial pressure on their refining operations. The high cost of crude oil, a crucial input for producing products like gasoline and jet fuel, is leading to elevated production expenses for refiners. These significant input costs are adversely impacting refiners' profitability.\nSlowdown in Production Growth to Hurt Upstream Business: There has been a slowdown in oil production growth in the upstream businesses of integrated energy companies in the United States due to shareholder demands for a greater focus on returning capital rather than investing in production expansion. As production growth slows, output decreases, which can lead to reduced revenues. Since upstream operations depend heavily on volume to generate income, any stagnation in production growth has a direct and negative impact on their bottom line.\nGrowing Demand for Renewables a Concern:Governments, investors and stakeholders are placing growing emphasis on addressing climate change, leading to an increased demand for renewable energy. Consequently, the demand for products reliant on oil, natural gas and natural gas liquids is expected to decline, with solar and wind energy gaining prominence in the energy landscape. The integrated energy firms are adversely impacted by these trends as they are primarily engaged in the production and transportation of fossil fuels, such as oil, and selling refined petroleum products.\nZacks Industry Rank Indicates Bearish Outlook\nThe Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. It carries a Zacks Industry Rank #138, which places it in the bottom 45% of more than 250 Zacks industries.\nThe group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.\nBefore we present a few stocks that you may want to consider, let’s take a look at the industry’s recent stock market performance and valuation picture.\nIndustry Underperforms Sector and S&P 500\nThe Zacks Oil and Gas Integrated International industry has underperformed the broader Zacks Oil - Energy sector and the Zacks S&P 500 composite over the past year.\nThe industry has soared 13.2% over this period compared with the S&P 500’s gain of 34.9% and the broader sector’s rise of 14.2%.\nOne-Year Price Performance\n\nIndustry's Current Valuation\nSince oil and gas companies are debt-laden, it makes sense to value them based on the Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA) ratio. This is because the valuation metric takes not just equity into account but also the level of debt.\nOn the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 4.29X, lower than the S&P 500’s 18.54X. It is, however, above the sector’s trailing 12-month EV/EBITDA of 3.52X.\nOver the past five years, the industry has traded as high as 6.45X and as low as 2.74X, with a median of 4.18X.\nTrailing 12-Month EV/EBITDA Ratio\n\n\n4 Integrated International Stocks to Keep a Close Eye on\nBP: The British energy giant plans to become a net-zero emissions company by 2050 or sooner. The integrated company aims to invest in and develop a renewable energy generation capacity of 20 gigawatts by 2025. Currently carrying a Zacks Rank #3 (Hold), BP has robust upstream and downstream operations. Notably, during periods of low oil prices, BP can rely on its strong downstream and marketing activities to support its financial performance.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. \nPrice and Consensus: BP\n\nShell: In liquified natural gas, Shell is among the leading global players. Also, the rapid growth of its renewable business is among Shell's core strategies. On the renewable energy front, Shell has almost 47 gigawatts of renewable generation capacity, considering projects that are either in operation, under construction or in the pipeline. Thus, for renewables and energy solutions, SHEL, with a Zacks Rank of 3, is investing actively in solar energy, wind energy, electric vehicle charging and others.\nPrice and Consensus: SHEL\n\nEni: Eni is leading the energy transition as well. The integrated energy player has been building a full set of decarbonized products and services for clients to achieve carbon neutrality by mid-century. Even though the energy business scenario is challenging, Eni’s efficient exploration keeps it highly competitive. It carries a Zacks Rank #3.\nPrice and Consensus: E\n\nChevron: In the Permian — the most prolific basin in the United States — Chevron is among the largest producers of oil and natural gas, securing a solid production outlook. Also, the large integrated energy player, with a Zacks Rank of 3, maintains a conservative stance regarding capital spending, resulting in handsome generations in cashflows.\nPrice and Consensus: CVX\n\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nChevron Corporation (CVX) : Free Stock Analysis Report\nBP p.l.c. (BP) : Free Stock Analysis Report\nEni SpA (E) : Free Stock Analysis Report\nShell PLC Unsponsored ADR (SHEL) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483637014"}