Wall Street Is Rushing Into Energy: Most Investors Still Don't Get Why

Leo Nelissen49.89K FollowersFollow5ShareSavePlay(12min)Comment(1)SummaryCanadian energy equities, led by names like Canadian Natural Resources, are experiencing a structural uptrend driven by deep reserves, low breakevens, and improving fundamentals.Valuation tailwinds remain strong, with upstream oil trading below 6x 2027E EBITDA; a re-rating to 9x could yield 30–40% upside even without higher earnings.Energy’s resilience is underpinned by efficient capital allocation, robust CROCI, and a surge in demand from data center and AI-driven infrastructure growth.Despite cyclical risks, I advocate buying corrections in energy, favoring both Canadian producers and diversified ETFs like XLE for growth and income exposure. Sinenkiy/iStock via Getty Images Introduction It’s time for another one of my long introductions, as I want to start this article by shining some light on one of my favorite places to put capital in one of my favorite sectors. ThatThis article was written byLeo Nelissen49.89K FollowersFollowLeo Nelissen is a long-term investor and macro-focused strategist with a passion for dividend growth, high-quality compounders, and structural investment themes. He combines big-picture macro analysis with bottom-up stock research to identify durable businesses with strong cash-flow potential. Leo also writes for Main Street Alpha, where he publishes deeper-dive research and actionable investment ideas for long-term investors.Analyst’s Disclosure: I/we have a beneficial long position in the shares of CNQ, TPL, LB either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.