According to TipRanks data, the oil and gas sector is currently preferred over the green energy sector. This sector has taken center stage amid the supply shortage and rising oil & gas prices due to the Russia-Ukraine war.
Notably, economies worldwide have been feeling the urgency to shift toward cleaner and greener fuel alternatives. However, the absence of alternative sources has led to an unexpected surge in the demand for traditional fuel options currently.
Europe, in particular, is facing the toughest energy crisis of all time. With the onset of winter, Europe will require even more oil & gas to power electric heaters. On the other hand, nuclear power plants, which are also used to generate electricity, are facing criticism for their side effects. Many nations have shut down their nuclear plants to reduce the emissions and impact on the human race.
We have looked at the expert sentiment for the ten largest stocks in each industry. Let us look at each of the expert’s sentiments in detail.
1) TipRanks Insider Sentiment is Positive on O&G
TipRanks Insider Trading Tool shows that corporate insiders in the top oil & gas companies have snapped up over $9.07 billion worth of shares since the start of 2022.
On the contrary, insiders in the top green energy companies have dumped their holdings to the tune of $619.81 million, vis-à-vis buying merely $12.98 million worth of stock during the same period.
2) Analysts Remain Optimistic about O&G
The Russia-led war has certainly brought limelight to the oil & gas companies. Wall Street analysts seem to be highly optimistic about the largest oil & gas companies compared to the green energy companies.
TipRanks data shows that 82.7% of analysts in the TipRanks universe recommended a Buy rating on oil & gas stocks, while 64.3% had a Buy rating on energy stocks. Similarly, 94.8% of analysts have maintained their recommendations on oil & gas stocks as compared to 90.2% who have reiterated their calls on energy stocks.
3) Analyst Price Targets and Earnings Beat
As per TipRanks data, from 2018 until now, 79% of oil & gas stocks have outperformed analysts’ earnings per share (EPS) forecasts. On the contrary, 58% of energy companies missed analysts’ expectations in the same period.
Also, a whopping 74.1% of analysts have improved their price targets on oil & gas stocks vis-à-vis 52.8% of improved price targets on energy stocks. Meanwhile, nearly 29% of analysts have reduced their price targets on green energy stocks, compared to 25% of analysts who have reduced price targets for oil & gas stocks.
Ending Thoughts
As seen from the above data, the oil & gas sector is currently in high demand. With no end to the war in sight and with winter approaching, experts are fearing how the European nations will survive. The demand for more production and supply of oil & gas resources will continue to dominate the energy market in the short term.
On the other hand, renewable energy resources are still in very nascent stages of development. Even traditional oil & gas companies are making huge investments to turn toward green energy alternatives. But until sustainable energy resources are fully available to the masses, the traditional oil & gas companies’ products will continue to be in demand.
All in all, considering the current macroeconomic backdrop, both insiders and analysts remain highly bullish on the oil & gas sector compared to the green energy sector.
