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Here's Why Equinor (EQNR) is an Attractive Investment Bet

Equinor ASA EQNR has witnessed upward earnings estimate revisions for 2022 and 2023 in the past seven days. So far this year, the Zacks Rank #2 (Buy) stock has gained 25.4%, outpacing the industry’s 12.8% growth.

What’s Favoring the Stock?

Oil prices are still highly favorable for exploration and production activities, despite uncertainties prevailing in the energy market on fears of recession. Thus, business prospects for Equinor’s upstream operations look good. In the second quarter, EQNR made three commercial discoveries, and is expecting oil and gas production growth of roughly 2% in 2022.

Equinor is strongly focused on returning capital to stockholders. For 2022, EQNR has increased its share repurchase program from up to $5 billion to up to $6 billion.

EQNR is also leading energy transitions. Equinor is planning to become a net-zero emissions player by 2050. The integrated energy firm is planning to reduce net carbon intensity by 20% and 40% by 2030 and 2035, respectively.

Other Stocks to Consider

A few other top-ranked stocks in the energy space are Chesapeake Energy Corporation CHK, Enterprise Products Partners LP EPD and Exxon Mobil Corporation XOM. While Chesapeake Energy sports a Zacks Rank #1 (Strong Buy), Enterprise Products and ExxonMobil carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chesapeake Energy is a premium natural gas operator and is well-positioned to gain from the significant improvement in gas price in the past year. In the prolific gas-rich Marcellus shale play, CHK’s operation spreads across roughly 650,000 net acres, where an average of four to five rigs will be operating this year. Chesapeake Energy also has a strong presence in Haynesville and Eagle Ford shale play, making the production outlook bright. Overall, being a leading upstream energy player, CHK has more than 15 years of inventory, signifying more than 2,200 gas locations.

Enterprise Products generates stable fee-based revenues from its extensive pipeline network across more than 50,000 miles, transporting natural gas, natural gas liquids (NGLs), crude oil petrochemicals and refined products.

The midstream infrastructure provider also has storage assets that can hold more than 260 million barrels of NGL, petrochemical, refined products and crude oil. These assets can also store 14 billion cubic feet of natural gas. Moreover, Enterprise Products has $5.5 billion of major capital projects under construction that are likely to provide incremental fee-based revenues.

The positive trajectory in oil price is a boon for ExxonMobil’s upstream operations. This is because ExxonMobil has a pipeline of key projects in the Permian – the most prolific basin in the United States – and offshore Guyana.


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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
Chesapeake Energy Corporation (CHK) : Free Stock Analysis Report
 
Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report
 
Equinor ASA (EQNR) : Free Stock Analysis Report
 
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