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Why Equinor (EQNR) Offers a Good Buying Opportunity Now

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Equinor ASA (EQNR - Free Report) stock appears to be a solid bet now, based on strong fundamentals and compelling business prospects. Moreover, in the past six months, the stock has gained 17.8% against the industry’s 16.4% decline.

Headquartered in Stavanger, Norway, Equinor is one of the premier integrated energy companies in the world, providing energy to 170 million people every day. It is one of the largest offshore operators in the world. The company has beaten earnings estimates in the last four quarters, with an average surprise of 66.6%

Equinor ASA Price and EPS Surprise

Equinor ASA Price and EPS Surprise

Equinor ASA price-eps-surprise | Equinor ASA Quote

Let's see what makes this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.

Growth Drivers

Equinor is a premier integrated energy company, with operations spreading across more than 30 countries. In Europe, it is the second-largest supplier of natural gas. Equinor is also a leading seller of crude oil. Over the years, the company has developed its expertise to expand upstream operations outside of conventional offshore resources to the prolific shale oil and gas plays.

The company made 16 commercial oil and gas discoveries in 2019, reflecting a significant increase from the nine discoveries made in 2018. Also, at the end of second-quarter 2020, the energy giant made six commercial discoveries. Some of the notable discoveries were made at the U.S. Offshore Gulf of Mexico and Brazil’s Santos basin. During third quarter-end, it announced a hydrocarbon discovery in the Swisher prospect, located in the North Sea, offshore Norway. This finding is expected to hold 13-38 million barrels of oil equivalent. All the discoveries are likely to help Equinor reach compound annual oil-equivalent production growth rate of 3% through 2026 since 2019.  

Notably, the integrated firm’s key strategy is to capitalize on the renewable energy space and align its operations with the Paris Climate Agreement. Thus, to combat climate change, the company is investing actively in renewable energy projects, comprising power generation from solar and wind energy. Equinor expects to boost production capacities from renewables to 4-6 gigawatts (GW) by 2026. The company also aims to reduce the carbon intensity of energy products by 50% across worldwide operations by 2050.

Moreover, by 2035, the company plans to further boost the capacity of renewable projects to 12-16 GW. Notably, the company generates sufficient energy from wind farms located off the coast of Germany and U.K. to power more than one million homes in Europe. Moreover, outside of Europe, Empire Wind is the first wind project of the company. The offshore wind farm in New York is producing up to 2000 megawatts of electricity. Also, Equinor's objective is to keep unit production cost in check, with a view of attaining top quartile performance within the relevant peer group.

Other Stocks to Consider

Other top-ranked players in the energy space include EOG Resources, Inc. (EOG - Free Report) , Apache Corporation (APA - Free Report) and Premier Oil plc , each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EOG Resources’ sales for 2021 are expected to jump 19.6% year over year.

Apache’s bottom line for 2021 is expected to surge 87.7% year over year.

Premier Oil’s bottom line for 2021 is expected to surge 80% year over year.

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