Sector Update: Energy Stocks Mixed Tuesday Afternoon

The energy sector is in a state of flux today, with stocks showing divergent performance amid a volatile oil market and shifting corporate strategies. Let’s break down what’s moving—and what’s not—right now.

The Big Picture: Oil Prices Under Pressure
Oil prices are the linchpin here.

As of Tuesday’s close, WTI crude sank to $55.80/bbl, down nearly 4% from last week, while Brent dropped to $58.90/bbl. OPEC+’s decision to flood the market with 800,000 bbl/d of additional supply by June has slammed prices, targeting U.S. shale producers in the process.

This is a brutal environment for high-cost operators. The Bakken and D-J Basins, which require breakeven prices of $83–$80/bbl, are gasping for air. But not all energy stocks are drowning.

Winners: Companies with Bones

1. Chord Energy (CHRD): A Shale Survivor
Chord’s stock rose 2.09% to $92.50 in after-hours trading Monday, and it’s holding firm today. Why? This Permian Basin player has $8–12/bbl breakeven costs—half the industry average—thanks to 4-mile lateral drilling and a 0.3x leverage ratio (vs. peers’ 1.0x). Its inventory of 10 years of sub-$60/bbl reserves makes it a rare buy in a cheap sector.

2. Fluence Energy (FLNC): Betting on Renewables
FLNC’s stock surged after its Q2 earnings report Tuesday, as investors cheered its progress in energy storage projects. The company’s $10.5 million Q1 revenue (up 58% Y/Y) and partnerships with Puerto Rico and the UK signal growth in grid resilience. Despite a Guggenheim “Sell” rating, insiders have been buying—$730,000 in shares over six months—and the median analyst target is $8.00, up from today’s $6.50.

Losers: The High-Cost and the Overvalued

1. Eos Energy Enterprises (EOSE): Stuck in Neutral
EOSE’s stock has been stagnant despite its zinc battery tech and UK/Puerto Rico projects. The problem? Its valuation. While it’s guiding for $150–190 million in revenue this year, the stock still trades at a “small cap” multiple for a company with “large cap” ambitions. Until it proves scalability, this one’s a wait-and-see.

2. The Overvalued Consumer Defensive Sector
While not energy stocks, the consumer defensive sector (think Walmart, Costco) is overvalued, per recent metrics. Investors fleeing these overpriced names might be rotating into energy’s second-most undervalued sector status—a tailwind for bargain hunters.

The Bigger Play: The Energy Sector’s Undervalued Opportunity

Despite oil’s slump, the energy sector remains a steal. The sector trades at an 8% discount to fair value, with Chord and Fluence leading the charge. Even as OPEC+ floods the market, Permian Basin resilience and renewables growth are two-way tickets to upside.

Action Plan: Buy the Dip, But Be Picky

• Buy CHRD now: Its sub-$60 breakeven and clean balance sheet make it a must-own.
• Watch FLNC post-earnings: The stock could hit $10 if it nails growth guidance.
• Avoid high-cost shale: The Bakken and D-J are out of luck until oil hits $70+.

The sector’s mixed performance today is a feature, not a bug. This is a buyer’s market for those willing to sift through the rubble.

Conclusion: Energy’s Mixed Bag is a Bargain Hunter’s Dream

With oil prices near $55 and the sector undervalued, this is a time to act. Chord’s operational excellence and Fluence’s renewable edge are today’s winners, while OPEC+’s overproduction keeps pressure on laggards.

The data is clear: the energy sector is not dead—it’s just being reborn. Investors who pick the right companies now will be laughing all the way to the bank when oil recovers. This is a call to buy the dip, but only where the bones are strong.

Stay hungry, stay Foolish.