Goldman Sachs believes the current downturn in the energy sector has created attractive opportunities for investors. The Energy Select Sector SPDR Fund was down about 8% year-to-date through last Friday, according to FactSet. The energy sector is down 9.4% in 2023, the largest decline among the 11 major S & P 500 sectors. Meanwhile, the broad market index is up 9.4% in 2023. Goldman attributes the energy sector's underperformance to a combination of macroeconomic conditions.
"While the outlook is less favorable today, we continue to believe AR is favorably set up to benefit from its low cost Appalachia assets and strong balance sheet, which can support greater cash returns; its ability to achieve premium pricing for 75% of its gas sold in the Gulf Coast, which is priced at a premium to Henry Hub; and our favorable long-term estimate for NGLs prices with improvement in chemical demand," analyst Neil Mehta wrote in a note Friday.