2 Energy Stocks to Buy as Crude Oil Prices Rise
After dipping under $70 a barrel last month, crude oil prices have rebounded and climbed to $80 to begin April.
Crude oil prices rose 6% today as OPEC led by Saudi Arabia agreed to a surprise cut in production over the weekend. With global supply dropping and prices going up, this could potentially lead to increased oil production in the United States and other non-OPEC nations.
With that being said, let’s take a look at two top-rated Zacks Oils & Energy stocks that could be beneficiaries of this scenario.
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Riley Exploration Permian (REPX)
Starting out is Riley Exploration Permian (REPX) which sports a Zacks Rank #1 (Strong Buy). Riley is an independent energy company involved in the acquisition, exploration, development, and production of oil and natural gas liquids in the coveted Permian Basin.
Riley’s earnings estimate revisions have soared over the last 30 days. Fiscal 2023 earnings estimates have jumped 42% while FY24 EPS estimates have skyrocketed 83%.
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According to Zacks estimates, Riley’s earnings are now expected to leap 50% this year at $8.61 a share compared to EPS of $5.72 in 2022. More impressive, fiscal 2024 earnings are projected to climb another 32% to $11.38 per share. Strong top-line growth is expected as well, with sales set to rise 17% this year and jump another 38% in FY24 to $486 million.
The incredible performance in Riley stock has continued into 2023. Shares of REPX trade at $42 and are up +45% year to date to largely outperform the S&P 500’s +7% and the Oil & Gas U.S. Exploration & Production Markets -11%. Even better, the Average Zacks Price Target still offers 11% upside from current levels.
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Weatherford International (WFRD)
Another Zacks Oils and Energy stock investors may want to consider at the moment is Weatherford International (WFRD) which is also sporting a Zacks Rank #1 (Strong Buy).
Weatherford looks poised to benefit from OPEC’s production cut as an oilfield services company that offers drilling solutions, gas well unloading, restoration, and other related activities.
To that point, Weatherford’s fiscal 2023 earnings estimates have already soared 44% over the last two months with FY24 EPS estimates up 40%.
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Weatherford’s earnings are now expected to soar 364% this year at $3.99 a share compared to EPS of $0.86 in 2022. Better still, fiscal 2024 earnings are projected to pop another 40% to $5.59 per share. Sales are forecasted to jump 13% this year and rise another 10% in FY24 to $5.39 billion.
Weatherford stock trades around $62 per share and is up +22% YTD to top the benchmark and its Oil & Gas-Field Services Markets -9%. Plus, the Average Zacks Price Target suggests 30% upside from current levels.
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Bottom Line
Higher crude oil prices and the possibility of increased production in the U.S. could lead to earnings estimates soaring even more for Riley Exploration Permian and Weatherford International. This would continue to support further upside in their stocks after an already stellar start to 2023.
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Riley Exploration Permian, Inc. (REPX) : Free Stock Analysis Report
Weatherford International PLC (WFRD) : Free Stock Analysis Report
