The Zacks Analyst Blog Highlights: Peabody Energy, First Solar, General Motors, Ford Motor and Tesla

For Immediate Release

Chicago, IL – November 20, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Peabody Energy Corp. BTU, First Solar, Inc. FSLR, General Motors Company GM, Ford Motor Company F and Tesla, Inc. TSLA.

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Here are highlights from Monday’s Analyst Blog:

4 Industries in Focus If Oil Prices Edge Up

President Donald Trump’s aim to reduce energy costs for Americans may be stumbling upon a new obstacle as Saudi Arabia has been slashing oil exports to the United States since September. Continuing with the trend that started two months ago, the desert kingdom is putting even fewer barrels aboard oil tankers to the United States in a bid to drive oil prices up.

Oil Prices Likely to Surge

Saudi Arabia’s November decline in the number of barrels shipped to the United States comes after a six-week oil market drop that pushed oil into a bear market.

Oil prices rose about 1% on Nov 19 amid prospects of Saudi Arabia pushing Organization of the Petroleum Exporting Countries (OPEC) along with Russia curbing supplies in an oversupplied global market toward the end of this year.

December Brent crude oil futures rose 1% from its previous close to reach $67.41 per barrel at 07:46 GMT on Nov 19 and West Texas Intermediate increased 1.4% to reach $57.22 a barrel.

Per a CNBC report, Saudi Arabia had slashed crude oil supplies to the United States last year as well in order to ramp up oil prices by curbing global saturation and decreasing output along with other OPEC member nations and Russia.

"It worked so well in 2017 for [Saudi Arabia] to cut flows to the U.S. because people could see the inventories dropping because U.S. data is so timely and transparent," Matt Smith, Energy data provider Clipper Data’s head of commodities research, said.

Less supply could lead to a drop in U.S. stockpile inventories, hence pushing oil prices up. The OPEC, led by Saudi Arabia, is planning to cut 1-1.4 million barrels per day of global supply to stabilize the declining-demand, oversupplied-market scenario.

Alexander Novak, Russia’s energy minister, said on Nov 19 that the country was planning to sign a partnership agreement with OPEC, details of which would likely be discussed at an OPEC summit in Vienna on Dec 6.

Given the likeliness of OPEC and Russia cutting crude oil supplies, a rise in oil prices is a possibility in the near future.

Industries That Could Benefit From Potential Rise in Oil Price

Increasing oil prices may not be favorable for many consumers and companies, but there are some industries whose business models allow them to profit from it. Saudi Arabia’s decision to cut crude oil shipments could prove beneficial for these industries, which could offer good investment opportunities to investors.

Rising oil prices often have a positive effect on alternative energy and oil substitute companies, as consumers turn to biofuels, coal and natural gas to compensate for energy. Coal companies such as Peabody Energy Corp. frequently benefit from higher oil prices.

Green technology companies such as solar module manufacturer First Solar, Inc. could gain too. Other green technology businesses that might benefit include hydrogen production units, solar and wind energy farms.

Hybrid vehicle manufacturers also profit from rising oil prices. Auto companies such as General Motors Company and Ford Motor Company also manufacture hybrid vehicles along with oil-dependent ones to compensate for losses from higher costs of oil. Auto giants such as Tesla, Inc. predominantly manufacture electric cars and hybrid vehicles and thus need not worry about an increase in oil prices.

Other industries that could benefit at present from high oil prices by virtue of the nature of their operations are industrial gas and waste management businesses.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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