UBS recently released a list of its highest-conviction energy picks for the remainder of the year. Analyst Josh Silverstein highlighted the firm’s top buy-rated stocks in the energy and utilities sectors, including companies like Suncor Energy, Coterra Energy, SLB, NextEra Energy, and First Solar. These picks are based on the current market trends and potential growth opportunities in the energy industry.
NextEra Energy and First Solar are two companies that stand out as direct beneficiaries of AI-driven electricity and data center demand. NextEra Energy, a leading player in renewable energy, has a strong balance sheet and stable growth potential, making it a top pick in the electric utilities subsector. Analyst William Appicelli believes that NextEra Energy’s upcoming investor meeting and clean energy contract announcements could drive significant upside for the stock. Similarly, First Solar, with its unique technology and focus on AI-driven electricity demand growth, is well-positioned to capitalize on the increasing demand for renewable energy and U.S. protectionism. Analyst Jon Windham sees First Solar as a differentiated technology company with strong underlying demand, which justifies a higher valuation.
SLB, formerly known as Schlumberger, is Silverstein’s top pick in the oil services and equipment sector. Despite a decline in its stock price this year, SLB presents significant upside potential, according to UBS. Silverstein points to SLB’s high margin Digital and Integration unit as a key driver of its growth, along with its improved balance sheet that allows for substantial shareholder returns. As the world’s largest offshore drilling company, SLB is well-positioned to benefit from the recovery in oil prices and increased demand for drilling services.
Coterra Energy and Suncor Energy: Upcoming Energy Players
UBS also named Coterra Energy and Suncor Energy as favorites in the energy and utilities sectors. These companies have strong growth prospects and are expected to deliver solid returns to investors. Coterra Energy, an emerging player in the energy industry, is positioned for significant growth, while Suncor Energy, a well-established player, continues to expand its footprint in the market. Both companies are set to benefit from the ongoing recovery in the energy sector and the increasing focus on renewable energy sources.
UBS’s highest-conviction energy picks for 2023 showcase the firm’s optimism about the future of the energy industry. By investing in companies like NextEra Energy, First Solar, SLB, Coterra Energy, and Suncor Energy, investors can capitalize on the growing demand for renewable energy, AI-driven technologies, and oilfield services. These companies are well-positioned to outperform the market and deliver strong returns to shareholders in the coming year.