Forum Energy (FET) Soars 5.4%: Is Further Upside Left in the Stock?

Forum Energy Technologies (FET) shares rallied 5.4% in the last trading session to close at $47.98. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 15.2% gain over the past four weeks.

The surge stems from FET’s solid position as a global supplier of energy equipment and services to upstream oil and gas industry, as well as to industrial and renewable energy sector, coupled with rising global demand for oil and natural gas. Strong global GDP growth, ongoing urbanization, and surging power requirements from AI data centers are driving higher energy demand.

To meet this rising demand, the company expects U.S. LNG exports to nearly double by 2028. By 2030, global exploration and production companies will need to offset nearly 29 million barrels per day of production decline from existing fields while adding approximately 6 million barrels per day of new output. Meeting these requirements will necessitate increased use of energy equipment and services, supporting FET’s expectation that rig counts will return to around 2023 peak levels, alongside continued service-intensity gains of about 7% annually.

This provider of manufactured technologies and applied products in the energy sector is expected to post quarterly earnings of $0.36 per share in its upcoming report, which represents a year-over-year change of +175%. Revenues are expected to be $190.5 million, down 5.2% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Forum Energy, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FET going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Forum Energy is a member of the Zacks Oil and Gas - Mechanical and and Equipment industry. One other stock in the same industry, North American Construction (NOA), finished the last trading session 4.6% higher at $16.03. NOA has returned 2.1% over the past month.

For North American Construction, the consensus EPS estimate for the upcoming report has changed -29.5% over the past month to $0.5. This represents a change of -29.6% from what the company reported a year ago. North American Construction currently has a Zacks Rank of #5 (Strong Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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