Top 3 U.S. Upstream Stocks to Consider Now Despite Headwinds

Industry Overview - The Zacks Oil and Gas - Exploration and Production - United States industry is experiencing a mixed outlook, with OPEC revising its 2025 oil demand growth forecast down to 1.3 million barrels per day due to sluggish global consumption and rising U.S. tariffs [1][3] - Natural gas prices have surged, increasing 44% in 2024 and another 13% in Q1 2025, driven by cold weather, tight supply, and strong global demand [1][4] - The clean energy transition poses a long-term risk to fossil fuel demand as renewables and electric vehicles gain traction [1][5] Key Trends - OPEC's downward revision of oil demand growth reflects concerns over slower consumption and trade dynamics affected by U.S. tariffs [3] - Natural gas fundamentals indicate tight supply and strong demand, with prices reaching a two-year high of $4.491 [4] - The shift towards clean energy could lead to a structural decline in traditional oil demand over the next 5 to 10 years [5] Industry Performance - The Zacks Oil and Gas - US E&P industry ranks 192 out of 246 Zacks industries, placing it in the bottom 22% [6] - The industry's earnings estimates for 2025 have decreased by 33.7% over the past year, indicating a negative earnings outlook [7] - Over the past year, the industry has declined by 32.9%, underperforming both the broader Zacks Oil - Energy Sector and the S&P 500 [9] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 10.70X, lower than the S&P 500's 15.58X but above the sector's 4.36X [13] - Historical trading ranges for the industry show a high of 15.45X and a low of 3.56X over the past five years [13] Investment Opportunities - HighPeak Energy is highlighted as a strong investment opportunity, with a projected 92.5% increase in 2025 earnings and a 45% upward revision in earnings estimates over the past 60 days [15][16] - EQT Corporation, the largest natural gas producer in the U.S., has an expected EPS growth rate of 51.2% over the next three to five years, with an 11% increase in earnings estimates recently [18][19] - Antero Resources shows a remarkable projected 1,514.3% year-over-year growth in 2025 earnings, with a strong production outlook from its low-cost drilling inventory [20][21]