KeyBanc cuts oil forecast but upgrades Expand Energy on natural gas outlook

Published 21/04/2025, 17:02
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Investing.com -- KeyBanc Capital Markets lowered its oil price forecast and raised its natural gas outlook, reflecting a shift in commodity expectations ahead of the first-quarter earnings season.

The firm also upgraded natural gas producer Expand Energy to “Overweight” with a $130 price target, citing its defensiveness and investment-grade status.

KeyBanc now forecasts WTI crude at $66 in 2025 and $65 in 2026, down 11% and 8%, respectively. The firm lifted its Henry Hub gas outlook to $3.80 for both years, up 21% and 9%.

We believe oil prices are overly pressured near term, KeyBanc wrote, adding that the natural gas setup remains recession-proof, although perhaps not 100% tariff-proof.

The firm sees Expand as well-positioned amid investor preference for large, stable gas-weighted equities.

Spring marketing trips confirm natural gas remains the safety trade, analysts said, noting that institutional investors remain constructive on the commodity despite recent pullbacks.

KeyBanc downgraded Murphy Oil (NYSE:MUR) to “Sector Weight” and removed its $37 target, citing lack of hedging, limited buyback flexibility, and muted interest in offshore operators.

The firm also trimmed price targets across its oil-levered coverage, including cuts for EOG Resources (NYSE:EOG), Diamondback (NASDAQ:FANG) Energy, and Viper Energy (NASDAQ:VNOM).

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