Due to ongoing conflict in Iran, the Strait of Hormuz remains closed or severely restricted for commercial shipping, impacting global energy markets. The strait is critical, accounting for 20% of global oil supply and roughly 25% of the world’s LNG. As a result, crude oil prices are holding above $90 per barrel, while LNG prices are also elevated.
Three energy sector stocks recently received Zacks Rank #1 (Strong Buy) ratings. Weatherford International (WFRD), a prominent oilfield services provider operating in over 70 countries, has seen a 12% increase this year and 60% rise over the past year, boosted by $466 million in free cash flow and promising contracts. Drilling Tools International (DTI), trading under $5 per share, is projected to see a 90% EPS increase to $0.19 in FY26. CrossAmerica Partners (CAPL), benefiting from high motor-fuel prices, has also experienced an increase in its EPS estimates and offers a 9.78% annual dividend yield.
Weatherford’s valuation stands at 14X forward earnings, below the industry average of 19X. DTI’s earnings are forecasted to grow further by 68% to $0.32 in FY27. CAPL trades at 49X forward earnings but is recognized for its strong balance sheet and consistent cash flow distributions as a Master Limited Partnership.
