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Quarter-End Insights

Despite Rally, Energy Stocks Still Look Cheap

It's been rocky, but the worst is probably behind us.

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The energy industry still faces a very difficult environment, but the outlook brightened somewhat during the second quarter. The Morningstar US Energy Index mirrored the broader market rebound, gaining 37% in the period. And oil prices rallied sharply, with the West Texas Intermediate benchmark roughly doubling since the end of March. But by and large, the sector remains undervalued and trades at a 23% discount.

U.S. energy recovery mirrors the market. - source: Morningstar

Dave Meats does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.