Elon Musk Calls On European Energy Leaders For More Oil And Gas — And This Company Stands To Benefit

Tesla Inc TSLA CEO Elon Musk told shareholders on Monday at the 2022 Offshore Northern Shore Conference in Stavanger, Norway, that the world needs more oil and natural gas, and should invest heavily in renewable energy sources.

"I think we actually need more oil and gas, not less, but simultaneously moving as fast as we can to a sustainable energy economy,” Musk said.

Enter Southwestern Energy Company SWN, an independent energy company focused on responsibly developing America’s abundant supply of natural gas, oil and natural gas liquids to fuel economic growth.

Southwestern Energy saw annual revenue soar to $6.67 billion in 2021, a major uptick from the $2.31 billion it generated in 2020.

“SWN’s losses also shrunk in 2021, as it lost $25 million compared to the $3.11 billion it did in 2020,” said analyst Gianni Di Poce in his weekly “Benzinga Pro Insider Report.”

The call: 33% potential return for investors: “I am bullish on SWN so long as the stock remains above $62.50-$63.50,” the analyst said. “Upside target $94-$96.”

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Southwestern is aiming to be a certified gas exporter, which could become lucrative given the energy crisis brewing in Europe. 

The company's core business is the exploration for and production of natural gas, oil and natural gas liquids, with ongoing operations focused on the development of unconventional natural gas reservoirs located in Pennsylvania, West Virginia, Ohio and Louisiana.

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Southwestern is highly-leveraged, but it currently has 40% of its 2023 production unhedged.

“If oil and natural gas continue to spike, it would create a potential windfall profit scenario for the company,” said Di Poce.

The technical outlook favors the bulls as prices just retested former-resistance-turned-support of a rounding bottom pattern. “This is creating a higher low, which could reinforce the short-term uptrend,” the analyst said.

Other SWN analyst ratings:
RBC Capital: Maintained Sector Perform
Citigroup Inc C: Buy
Morgan Stanley MS: Equal weight
Mizuho Financial Group Inc MFG: Buy

Photo: Anton Watman via Shutterstock