UBS has published its top stock selections in the oil sector, focusing on names that the bank believes have cleared notable operational hurdles and present the strongest potential for valuation re-rating across exploration and production and oilfield services segments.
The selections emphasize firms that have taken concrete steps to improve their financial profiles or expand strategic capabilities through acquisitions, divestitures or technology initiatives. UBS highlights the companies below as those most likely to benefit from these changes.
Ovintiv (NYSE:OVV)
UBS places Ovintiv at the head of its exploration and production picks, citing the company’s recent portfolio moves as having resolved two principal issues that had weighed on its valuation. The bank notes that Ovintiv’s acquisition of NVA’s Montney assets, paired with its announced Anadarko Basin divestiture, has substantially addressed concerns related to crude and condensate inventory levels as well as a previously high debt burden.
On a pro-forma basis, UBS argues Ovintiv should not continue trading at one of the lowest multiples within the exploration and production peer group. The investment bank views the company as presenting the best opportunity for a re-rating among its E&P coverage given that updated profile.
Operationally and at the results level, Ovintiv reported fourth-quarter earnings that outperformed analyst estimates, delivering earnings per share of $1.39 against a consensus forecast of $0.97. The company has also drawn new market attention, with Truist Securities initiating coverage and assigning a buy rating.
Antero Resources (NYSE:AR)
UBS supports Antero Resources based on its exposure to international natural gas liquids export markets, which the bank says allows the company to capture higher realized pricing. A central element of UBS’s endorsement is the integration of HG, which the firm describes as the most material near-term value driver for Antero.
According to UBS, the HG transaction enhances operational scale, improves the balance sheet, leverages Antero’s existing midstream footprint, and creates a clear route to synergies that the bank expects to exceed initial projections. UBS underscores that these elements underpin the company’s potential to deliver incremental value.
Recent company disclosures align with UBS’s view: Antero reported fourth-quarter results in which both earnings and revenue surpassed projections. The company also completed the sale of its Utica Shale assets for total cash consideration of $800 million.
SLB (NYSE:SLB)
In the oilfield services arena, UBS highlights SLB for a set of technology and activity-related catalysts that could support a multiple expansion. Key factors cited include execution of the company’s Digital growth strategy, the integration of CHX, accelerating artificial intelligence hardware growth, and returning activity levels in Saudi Arabia.
UBS continues to view SLB’s new Digital unit as an important element supporting the potential for a stock re-rating. In recent corporate developments, SLB announced an expanded technology collaboration with NVIDIA aimed at building AI infrastructure for the energy industry. Separately, SLB’s OneSubsea joint venture was awarded a multi-well subsea production systems contract by China National Offshore Oil Corporation.
Collectively, UBS’s selections reflect a focus on companies that have addressed prior operational weaknesses or that possess identifiable growth levers. The bank’s analysis centers on asset portfolio shifts, balance sheet improvements, midstream integration and technology-led service expansion as the principal drivers that could reshape investor sentiment toward these names.