Liberty Energy (LBRT) is expected to benefit from its new power generation services business, whose earnings prospects are undervalued by investors, as well as from the stabilizing North American fracking market, Morgan Stanley said in a note Wednesday.
Liberty Energy's experience in developing mobile power generating units for its electric fracturing fleet, gas logistics business, innovation culture, and strong management give it a competitive advantage, according to the note.
The company's core completion services business might be at a market bottom, but recovery is expected in gas demand and frac activity, Morgan Stanley said.
Liberty Energy is strategically positioned to capitalize on growing power demand, particularly from data centers and industrial users, the note added.
Morgan Stanley upgraded Liberty Energy's stock to overweight from equal-weight and raised its price target to $25 from $20.
Shares of the company were up 5.8% in recent trading Thursday.
Price: 16.32, Change: +0.90, Percent Change: +5.80
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