Oilfield services firm Liberty Energy is the IBD Stock Of The Day for Tuesday. LBRT shares broke out from a handle base on news that the stock is set to join the S&P 600. Crude oil futures also rallied, touching their highest price since November, after Saudi Arabia confirmed it would maintain its production cut of one million barrels per day.
LBRT stock joins the S&P SmallCap 600 on Sept. 18, the S&P Dow Jones Indices reported on Tuesday. The S&P SmallCap 600 index includes companies with market caps of $850 million to $5.2 billion.
Oil futures rose Tuesday after Saudi Arabia decided to extend its voluntary production cut of 1 million barrels per day through the end of the year, MarketWatch reported. Saudi oil production in October, November and December will remain around 9 million barrels per day.
West Texas intermediate crude oil futures climbed to $87 a barrel on Tuesday, their highest level since November 2022. U.S. oil prices last week clocked their first six-week advance in 2023, recovering from just above $67 in June.
Denver-based Liberty Energy provides onshore well completion expertise, which include fracking, well analysis and other services. The company averaged 61.75% sales growth in the past four quarters, but the pace slowed to a 27% clip for its Q2 results on July 19. Earnings increased 57% to 88 cents per share, marking five consecutive quarters of profit. The company recorded eight straight quarters of losses starting in Q2 2020.
For the year, FactSet analysts expect earnings to jump 40.5% to $3.09 per share on 11.11% revenue growth to $4.61 billion.
Among oilfield services providers, SLB (formerly known as Schlumberger) has surged 12.6% so far in 2023, while Tidewater has rallied 84%. Halliburton is up 3.7% since Dec. 31.
Liberty Energy stock ranks third in the Oil & Gas-Field Services Group, which is led by SLB, according to IBD Stock Checkup.
LBRT Stock
Liberty Energy stock broke out on Tuesday, popping above the 17.34 buy point of a cup-with-handle base. Shares rallied 7.5% on a third straight spike in daily trading volume. The current buy zone, which stretches 5% beyond the buy point, extends to 18.21.
LBRT stock also faces long-term resistance in the 18-20 range. So a break above those levels could mark an advance gaining strength.
Liberty shares have a stellar 98 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. LBRT stock has a 79 EPS Rating as earnings results rebound. Its relative strength line careened higher at the end of August, giving shares an 83 RS Rating. However, the stock is still off its highs from the beginning of the year.
Liberty Energy stock has advanced 10.8% in 2023.
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