Best Energy and Utility Stocks to Invest in for the Remainder of the Year: An Analysis by UBS

In a recent report, UBS analysts identified the most promising energy and utility stocks for the remainder of 2024. These companies are poised to benefit from various economic and market trends, offering investors substantial growth potential.

Energy Sector Stocks

ConocoPhillips (COP)

A leading independent exploration and production company with a strong track record of profitability and dividend growth.
Expected to benefit from continued high demand for oil and gas, driven by increasing global energy consumption.
UBS estimates a target price of $120 per share, representing a potential upside of 20%.

Chevron Corporation (CVX)

An integrated energy giant with operations spanning the entire oil and gas value chain.
Well-positioned to capitalize on both high oil prices and growing demand for natural gas.
UBS has set a target price of $180 per share, indicating a potential return of 15%.

NextEra Energy (NEE)

The largest electric utility in the United States, focusing primarily on renewable energy generation.
Benefiting from the ongoing transition to clean energy sources and increasing demand for electricity.
UBS predicts a target price of $100 per share, implying a potential gain of 10%.

TotalEnergies (TTE)

A French multinational energy company with a diversified portfolio of assets in oil, gas, and renewable energy.
Poised to thrive in the current energy market environment and has a strong track record of innovation.
UBS has assigned a target price of $65 per share, suggesting a potential upside of 12%.

Utility Sector Stocks

Dominion Energy (D)

A regulated electric and gas utility operating in Virginia, North Carolina, and South Carolina.
Expected to benefit from the growing demand for electricity and the need for infrastructure investments.
UBS estimates a target price of $70 per share, indicating a potential return of 10%.

American Electric Power (AEP)

An electric utility serving customers in 11 states and is a leader in smart grid technology.
Well-positioned to capitalize on the increased adoption of electric vehicles and the demand for reliable electricity.
UBS has set a target price of $100 per share, suggesting a potential upside of 15%.

Exelon Corporation (EXC)

A leading operator of nuclear and renewable energy generation facilities.
Benefiting from the need for reliable energy sources and the growing importance of decarbonization.
UBS has assigned a target price of $50 per share, indicating a potential gain of 9%.

NextEra Energy Partners (NEP)

A subsidiary of NextEra Energy that owns and operates various energy infrastructure assets.
Expected to benefit from the increased demand for natural gas and the growing importance of midstream infrastructure.
UBS estimates a target price of $80 per share, suggesting a potential upside of 11%.

Key Factors Supporting Growth

The identified energy and utility stocks are expected to perform well for the following reasons:

Strong Demand for Energy: Global energy consumption is expected to remain elevated, driven by economic growth and the shift towards cleaner energy sources.
Transition to Renewables: The increasing demand for renewable energy sources is providing significant opportunities for companies in this sector.
Aging Infrastructure: Significant investments are needed to upgrade and modernize aging energy and utility infrastructure, creating demand for new projects.
Favorable Regulatory Environment: Governments are increasingly supporting the development of renewable energy and the improvement of energy efficiency.

Investment Thesis

Investors seeking exposure to the energy and utility sectors and potential growth in the coming months should consider these highly rated stocks:

Energy Stocks: ConocoPhillips, Chevron Corporation, NextEra Energy, TotalEnergies
Utility Stocks: Dominion Energy, American Electric Power, Exelon Corporation, NextEra Energy Partners

Disclaimer: The information provided is for informational purposes only and should not be construed as financial advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.