Forecast for 2022 from Credit Suisse - Jan 1
Posted: Sat Jan 01, 2022 10:18 am
US E&Ps Rapidly Evolving: We expect the focus in 2022 will be more about differentiating among
E&Ps on shareholder returns and ESG. We think E&Ps need to offer a total cash return yield well
above the S&P 500 (~3%) to be compelling to value investors; several are poised to deliver high
single-digit yields in 2022-23E. Following substantial improvement in ESG disclosure over the past
two years, E&Ps now need to establish visible track records of improving environmental
performance and target setting to solidify their role in the Energy Transition.
Oil Macro: We forecast Supply/Demand fundamentals continue to improve, as we expect demand continues to
recover to pre-pandemic levels while OPEC+ will stick to its measured pace of output increases and
public US E&Ps remain under immense pressure from shareholders to uphold capex discipline. With
diesel demand now above pre-pandemic levels, and gasoline demand approaching the same, we
see upside bias to our 2022 Brent/WTI oil price forecasts of $69/$66.
Four of their Top Picks for 2022 are:
> Devon Energy (DVN)
> EQT Corp (EQT)
> Ovintiv (OVV)
> Pioneer Natural Resources (PXD)
E&Ps on shareholder returns and ESG. We think E&Ps need to offer a total cash return yield well
above the S&P 500 (~3%) to be compelling to value investors; several are poised to deliver high
single-digit yields in 2022-23E. Following substantial improvement in ESG disclosure over the past
two years, E&Ps now need to establish visible track records of improving environmental
performance and target setting to solidify their role in the Energy Transition.
Oil Macro: We forecast Supply/Demand fundamentals continue to improve, as we expect demand continues to
recover to pre-pandemic levels while OPEC+ will stick to its measured pace of output increases and
public US E&Ps remain under immense pressure from shareholders to uphold capex discipline. With
diesel demand now above pre-pandemic levels, and gasoline demand approaching the same, we
see upside bias to our 2022 Brent/WTI oil price forecasts of $69/$66.
Four of their Top Picks for 2022 are:
> Devon Energy (DVN)
> EQT Corp (EQT)
> Ovintiv (OVV)
> Pioneer Natural Resources (PXD)