SUPERNEWS - NASDAQ:APA (APA Corporation) Stock Price, News, Quote, History

Equinor, APA Stocks: Undervalued Energy Giants Set to Surge

<img src="https://cdn.tickerbell.ai/article/img/a2c0a5fae279-4c92-9c31-a345fc203504.png" alt="article-main-img" class="article-img" /> Energy sector lags in S&P 500; APA, Baker Hughes down 13% and 10% YTD amid oil price drop below $80/barrel. - APA stock could surge over 40% to its target, trading at a low forward P/E of 6.6; Equinor ASA and BP also undervalued with potential upsides of 12% and 26%, respectively. - Equinor preferred for upstream resilience; BP's new CEO Murray Auchincloss may signal strategic shifts. ## Energy Sector Under Pressure Yet Poised for Gains Despite the energy sector being the second-worst performer in the S&P 500 this year, certain stocks within the sector are identified as undervalued and ready for a breakout. APA and Baker Hughes have seen significant declines, with APA down by 13% and Baker Hughes by 10%. Oil prices have been subdued, trading below $80 per barrel, influenced by geopolitical tensions in the Red Sea and weak economic indicators from China. However, using the CNBC Pro Screener Tool, stocks like APA and Equinor ASA are trading below their historical averages and have substantial upside potential according to analysts' price targets. - APA is trading 16% below its 200-day moving average with a forward P/E of 6.6, indicating undervaluation and a potential surge of over 40% to its average price target. - Equinor ASA, with a forward P/E of 8.6, is trading 5% below its 200-day moving average and is expected to rise 12% to its consensus price target. - BP's U.S. listed shares are trading 7% below the 200-day moving average, with a forward P/E of 7.6, and could see a 26% increase to its average price target. ## Analysts' Perspectives on Energy Picks Analysts have provided insights into the potential of certain energy stocks, highlighting their defensive qualities and growth prospects. Bank of America's Christopher Kuplent upgraded Equinor ASA to buy, citing its strong balance sheet and earnings momentum as key factors for resilience in a year expected to have rangebound oil and gas prices. - Kuplent's analysis suggests Equinor's earnings momentum is set to inflect from a trough in the second quarter of 2023 towards an 11% year-over-year EPS growth in 2024. - BP's new permanent CEO, Murray Auchincloss, is stepping in after shares underperformed last year, with only a 5% increase and a more than 3% decline this year. ## Investment Opportunities in Energy The CNBC Pro Screener Tool criteria for identifying promising energy stocks include a market cap of more than $2 billion, a forward P/E ratio of less than 11, upside to average price target of more than 10%, and trading more than 5% below their 200-day moving average. These criteria have surfaced stocks that are considered cheap and have significant upside potential despite the overall sector's underperformance. - The selected stocks meet the criteria of having a market cap above $2 billion and trading at a forward P/E ratio below the sector aggregate of 11. - The identified stocks also have an upside of more than 10% to their average price targets, offering attractive entry points for investors. - Trading below their 200-day moving average suggests these stocks are currently out of favor, yet they hold potential for substantial gains based on the screener's analysis. ## STREET VIEWS - Christopher Kuplent, Analyst at Bank of America: > “We believe Equinor will be able to rely on more sources of resilience in what we believe will be a year of rangebound oil & gas prices. Equinor also fits into our relative preference for Upstream > Downstream – with its earnings momentum inflecting from a trough in 2Q23 toward 11% EPS growth y/y in 2024.” <div style="display: flex; flex-direction: row;" class="divbox"> <a style="display: flex; flex-direction: row;" class="MuiButtonBase-root wallstreet-review-item" href="https://www.cnbc.com/2024/01/17/these-energy-stocks-are-cheap-and-poised-for-a-breakout.html" target="_blank" rel="noopener noreferrer"> <div style="font-family: monospace; display: flex; ">  [1]  </div> <span> These energy stocks are cheap and poised for a breakout    </span> <span class="MuiTouchRipple-root"></span> </a> </div><div style="display: flex; flex-direction: row;" class="divbox"> <a style="display: flex; flex-direction: row;" class="MuiButtonBase-root wallstreet-review-item" href="https://www.ft.com/content/84a72d40-0b0b-49ce-b764-2c4c25b5127d" target="_blank" rel="noopener noreferrer"> <div style="font-family: monospace; display: flex; ">  [2]  </div> <span> An annotated BP share-price-to-bid-speculation chart    </span> <span class="MuiTouchRipple-root"></span> </a> </div><div style="display: flex; flex-direction: row;" class="divbox"> <a style="display: flex; flex-direction: row;" class="MuiButtonBase-root wallstreet-review-item" href="https://www.bloomberg.com/news/articles/2024-01-17/bp-confirms-auchincloss-as-new-ceo-after-predecessor-s-scandal" target="_blank" rel="noopener noreferrer"> <div style="font-family: monospace; display: flex; ">  [3]  </div> <span> BP Names Auchincloss as New CEO After Predecessor’s Scandal    </span> <span class="MuiTouchRipple-root"></span> </a> </div>

1/17, 14:01 EST