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Wall Street Expected a Good Year for These 3 Stocks—What Happened?
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Main points
- Wall Street expects the energy sector to outperform all other sectors this year after a difficult 2023.
- Oilfield services providers SLB and Halliburton, along with oil producer APA Corp., are among the stocks on the S&P 500 that analysts predict will be among the biggest gainers this year. Instead, they all fell by more than 28%.
- Oil prices are under pressure in 2024 due to record U.S. production and weak demand from China, one of the world’s largest crude consumers.
No one can predict the future, not even Wall Street analysts, although that’s part of their job.
According to a December 2023 analysis from FactSet Research, analysts expect energy stocks exist S&P 500 Index Gains this year will be over 25%, roughly double the expected return for the next best performer department. Of the 10 S&P 500 stocks analysts are most bullish on this year, three are in the energy sector: oilfield services provider SLB (SLB) and Halliburton (Hal) and oil and gas producer APA Corp.What).
It didn’t pan out the way Wall Street expected. The sector lagged the broader market for the second year in a row. Among the industries tracked by S&P Global Indexes, oilfield services and oil and gas exploration are the two worst performers in 2024, down 12% and 9% respectively as of Friday’s close. The three stocks mentioned above have all fallen more than 28% this year.
High supply, low demand will drive down oil prices in 2024
Supply strong and weak Require Oil prices have been under pressure this year, creating headwinds for crude oil extraction companies. OPEC+The Saudi-led oil cartel has been cutting production since 2023. But those cuts have been offset by record U.S. output and China’s economic slowdownthe world’s second largest oil consumer.
Things are not expected to be much better next year oil producer. USA Energy Information Administration (EIA) Crude oil prices are forecast to fall by an average of about 6% next year as domestic drillers increase production to a record 13.5 million barrels per day.
Still, Wall Street expects shares of the three major oil companies to rise sharply in 2025. APA’s median 12-month price target is about 33% higher than its price as of December 20. SLB’s shares are expected to rise 48%, and analysts expect Halliburton’s shares to rise 39%.
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