Separate calls from two investment banks, both reaching the same conclusion … to buy stocks in the energy sector
Goldman says valuations are attractive
- The 50 per cent plunge in Brent oil price since June is a gale force headwind for near-term Energy equity returns
- However, our sector allocation model suggests attractive current valuation and capital return to shareholders will support Energy sector outperformance during the next 12 months
Morgan Stanley are concerned their call to buy is ‘early’, bus say:
- We think that the stocks are cyclical,and every time they have been down this much they have subsequently outperformed the S&P 500 six months later
- Secondly, the stocks typically bottom before the earnings revisions bottom, on average by two months, and as numbers have been slashed and likely will be further cut during the coming earnings season, we know we have to be anticipatory
Via FastFT (gated)
