"Multiple" Observations

For the last 2.5 years, investors, management teams, etc have been railing about valuation multiples across the oil & gas sector.

History has shown that energy stocks as a whole don’t experience multiple expansions during these secular bull markets. They always appear “cheap.” (HERE).

That said, we finally got some multiple expansion as shown by the latest data point in the chart below.

It just wasn’t what most wanted and/or hoped it to be.

As the chart shows, energy’s EPS peaked in 1Q23 and with the index flat YTD, we got a little multiple expansion.

It’s occurring with ExxonMobil

Chevron as well.