The oil-energy sector remains in the spotlight, with the crude pricing environment now in its glorious days. Uncertainties stemming from the Iran war have been aiding the commodity’s price, with the West Texas Intermediate (“WTI”) crude hovering around $90 per barrel.
High price of the commodity is a boon for upstream operations and, in turn, is increasing demand for drilling and oilfield services. The refining business is also performing well, as global fuel demand remains strong while supply is limited. Thus, with overall energy businesses remaining favorable, let’s focus on three stocks that are undervalued at current levels: Ecopetrol S.A. EC, HF Sinclair Corporation DINO and Nabors Industries Ltd. NBR. Let’s delve deeper into the stocks.
3 Undervalued Energy Stocks in the Spotlight
Ecopetrol is an integrated energy giant in the American continent. The ongoing strength in oil prices is likely to have been aiding the company’s exploration and production activities. On its first-quarter 2026 earnings call, the company noted that a $1 change in Brent prices could increase its consolidated EBITDA by COP 700 billion. Thus, a Brent price above $95 per barrel is highly favorable for EC’s operations. Rising refining margin is also aiding its bottom line.
From a valuation standpoint, Ecopetrol trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 6.15X. This is below the broader energy-sector average of 6.81X. Hence, the stock, sporting a Zacks Rank #1 (Strong Buy), is undervalued now.
HF Sinclair is a well-known refining player with the majority of its earnings generating from this business. The global refining capacity is constrained, and fuel inventories are low. On the demand side, gasoline, diesel and jet fuel remain resilient. This means people are still driving and flying quite often, while diesel demand suggests transportation, freight, agriculture and industrial activity are still holding up. As a result, with busy refineries and fuel not available in abundance, refining margins for refiners like DINO are quite strong.
Coming to the valuation story, DINO trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.55X. This is also below the broader energy-sector average. Hence, this Zacks Rank #1 stock is also undervalued now.
Nabors Industries is a leading energy company known for providing drilling technology and services. In the Lower 48, NBR has a large land-rig footprint and exposure in the international market. Theongoing high oil prices are likely to have been aiding exploration and production activities, which in turn is expected to have a positive impact on demand for NBR’s drilling technology and services. In its first-quarter 2026 earnings call transcript, the company mentioned that in the Lower 48, it is expecting its rig day rates to rise to the mid-$30,000 range through 2027 from the low-$30,000 range.
Investors should know that NBR trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 3.21X. Currently, the stock carries a Zacks Rank #2 (Buy) and is undervalued now. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Nabors Industries Ltd. (NBR): Free Stock Analysis Report
Ecopetrol S.A. (EC): Free Stock Analysis Report
HF Sinclair Corporation (DINO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).