The energy sector is demonstrating strength with a "compelling valuation" that could set stocks up for a comeback after underperforming the broader market since September, according to Morgan Stanley.
Morgan Stanley recommends ConocoPhillips , Devon Energy , Occidental Petroleum and Diamondback Energy as ways to play the potential comeback.
The energy sector has been the best performer over the past month, but is still lagging the rally that began in October.
The S & P 500 energy sector is up more than 11% in 2024, while West Texas Intermediate futures have gained 14%.
Earnings revision breadth for energy stocks also appears to have bottomed and is moving in a positive direction, according to Morgan Stanley.
Persons:
Morgan Stanley, Michael Wilson, Wilson
Organizations:
Energy, ConocoPhillips, Devon Energy, Occidental Petroleum, Diamondback Energy, West Texas