The gusher of rising energy-stock prices, which has sent the sector up 66% in 2022 on top of 55% in 2021, may finally be calming a little. But there's still plenty of oomph left for volatility-tolerant investors to reap rich profits in energy stocks in 2023.
Global recessions, war and COVID could buffet the sector in the first half of the year, says Darrell Cronk, president of the Wells Fargo Investment Institute. But because he expects energy supplies to struggle to keep up with a likely economic recovery later in the year, his outlook for energy stocks remains bright. Wells Fargo sees the price of West Texas Intermediate crude finishing 2023 between $100 and $120 a barrel, up from $80 at the end of 2022. Alternative-energy sources aren't currently growing fast enough to meet demand, so Cronk says the outlook is positive over the long term for legacy energy producers-the companies that find, extract, refine, transport and store oil and gas. "We are only a couple of years into a multiyear bull supercycle," he says.
Just don't expect profits to grow at the torrid pace of the past couple of years. The consensus forecast of analysts is for energy profits to contract 13% in 2023, following an estimated 152% jump in 2022 compared with 2021, according to FactSet, an investment research firm. And there are still plenty of bargains. Based on estimated earnings, the energy sector carries the lowest price-earnings ratio of the 11 stock sectors in the S&P 500 index. While the P/E for the overall index is 17.3, stocks in the energy sector recently traded at an average P/E of 9.6-significantly less than the sector's long-term historical average P/E of 17.8, according to research firm CFRA.
Bu hikaye Kiplinger's Personal Finance dergisinin March 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Kiplinger's Personal Finance dergisinin March 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Giriş Yap
Your Vacation Home Could Provide Tax-free Income
If you plan to rent out your vacation home, it's important to understand how your proceeds will be taxed.
IT'S NOT YOUR IMAGINATION: YOUR CEREAL BOX IS SHRINKING
To avoid raising prices, some manufacturers are reducing the size of common grocery items. Here’s how to fight back.
SHOULD YOU WORRY ABOUT BEING LAID OFF? IT DEPENDS ON YOUR INDUSTRY
Downsizing has hit certain sectors. But cutbacks may be slowing, and some companies are expanding.
How identity thieves are exploiting your trust
Con artists themselves are disguising as well-known brands to steal your money and personal information.
CUT THE COST OF YOUR WIRELESS BILL
AT&T, T-Mobile and Verizon dominate the market, but smaller outfits offer similar network coverage at lower prices.
MAKING HOME ENERGY MORE AFFORDABLE
Households in need can get energy-efficiency upgrades, help with utility bills and more from this nonprofit.
A HEAD START FOR SAVERS
The Saver's Credit is designed to help low- and middleincome taxpayers contribute to a retirement account.
Say I Love You With a Money Date
To nurture a lasting bond with your partner, meet regularly to talk about money.
Plan for Your Own Elder Care
AFTER I wrote a series of columns in 2022 about elder care planning for family members, I received a number of responses like this one: “What about married couples who have no children or whose family members don’t live nearby?” wrote one reader. “Or a single individual with no close relatives? How should these people plan for their own elder care?”
OVERCOME RETIREMENT OBSTACLES
Most likely, you'll encounter setbacks on your journey. But with careful planning, you can surmount them.
