Secular growth tied to LNG exports, data-centre cooling needs and improving Permian Basin conditions is shaping new opportunities in the energy sector, according to one analyst’s top stock ideas.
BNN Bloomberg spoke with Stewart Glickman, analyst at CFRA, who outlined why he sees upside in oilfield services, liquefied natural gas infrastructure and a leading shale producer as multi-year trends support earnings potential.
Key Takeaways
- Long-term growth in LNG exports and data-centre cooling needs is strengthening demand across select energy segments.
- Baker Hughes’ industrial energy technology business is expanding, supported by rising backlog and strong margins.
- Cheniere Energy benefits from the U.S. natural gas cost advantage, supporting ongoing LNG export demand from Europe and Asia.
- Diamondback Energy is positioned to gain from improved natural gas takeaway capacity in the Permian Basin.
- Risks span upstream spending weakness, narrowing global gas price spreads and potential downside in crude prices.
Read the full transcript below:
ANDREW: Hot Picks. We’re looking at energy-related names, and our guest has Baker Hughes, the oil and gas services giant, as his top idea. We’re joined by Stewart Glickman, analyst at CFRA. Stewart, thanks very much for giving us the time. Give us your thesis on Baker Hughes, if you would.
STEWART: Hi Andy, thanks for having me. So Baker is, you know, prototypically known as one of the big three in oil services. Of course, oilfield services depends on upstream capital spending by the big players in the E&P space — the ConocoPhillips of the world, the Devon Energies of the world, and so on. And oil services right now does not look that great.
However, Baker has another avenue going for it, which is its industrial and energy technology business, which is very well levered to two emerging trends — or developing trends, if you will — probably through the end of the decade. One being LNG exports, liquefied natural gas, and the second being data-centre growth. All those data centres require lots of cooling technology to make sure everything is working well, turbines to have everything function properly. So Baker has exposure in those areas as well.
Right now, Baker’s revenue story, or profile, is about 50/50 between traditional oil services on the one hand and this industrial energy technology business on the other. The backlog is rising, the margins in IET are really strong, and we think it’s going to be a key driver for Baker for the next couple of years.
ANDREW: Well, I wonder, would they be tempted to do some kind of spin-off to, as you know, unbury the value — I forget the expression — surface the value?
STEWART: Yeah, so actually, it’s an interesting question. They’ve actually done kind of the opposite. They have added to their firepower in this area. They recently acquired Chart Industries, which gave them exposure, for example, into industrial energy technology that can be used in the mining industry, to which they did not have any exposure before. So it does look like they’re intentionally diversifying.
I think, to be fair, the margins in IET are quite strong, so it’s helpful to have that on hand, and it probably protects them to some degree if traditional oil services doesn’t recover in the way they would like. So having that in your back pocket is probably a plus.
ANDREW: You have an LNG name in Cheniere. The LNG is even the ticker symbol, and they’re a huge exporter.
STEWART: Yes, Cheniere Energy — as you mentioned, ticker LNG — is probably the dominant player, the first mover in liquefied natural gas exports. They are kind of a tolling booth for the industry. They have all the export facilities that allow natural gas to be cooled, put on an LNG tanker and shipped overseas to gas-hungry markets like Western Europe or Asia.
I think what Cheniere is benefiting from is that the U.S. is basically the low-cost leader when it comes to pricing for natural gas. Henry Hub — the U.S. benchmark — is somewhere in the neighbourhood of about US$4.50 to US$5 per million BTU. If you look at similar benchmarks overseas, in Europe the TTF is typically around the US$11 to US$12 per million BTU range. The JKM marker in Asia is in a similar neighbourhood, around US$12 per million BTU.
So it does pay for these buyers overseas to cover the shipping costs and move that natural gas from the low-cost region to their home markets. And there is certainly plenty of demand from both Asia and Europe. We don’t think that’s going to be changing anytime soon.
ANDREW: And then finally, Diamondback — another cute stock ticker symbol, FANG, so Diamondback is a snake. What’s the attraction here, Stewart?
STEWART: Right. So Diamondback is a pure play in the Permian Basin. The Permian is the workhorse of U.S. Lower 48 oil production. We are not particularly optimistic about oil prices in 2026 — they’ve averaged about US$66 a barrel in 2025 through November, and for 2026 we’re only projecting about US$63 a barrel.
I think what you have here, though, is a consensus expectation on Diamondback — and on oil producers in general — that oil prices are really going to disappoint. The EIA is calling for about US$51 a barrel next year. We think that’s a bit too pessimistic.
Secondly, Diamondback gets about 20 to 25 per cent of its production in the form of natural gas. One of the problems that has been chronic in the Permian Basin in the last several years is not enough takeaway capacity, and that has weighed on pricing. But just recently, there has been an expansion in that takeaway capacity, and there is more to come in 2026 — probably through 2028, actually.
What I think this means is that realized pricing for natural gas for pure plays like Diamondback in the Permian is probably not going to be as pessimistic, or as lousy, as it’s been the last couple of years. So we think that improves, and our estimates for earnings power for Diamondback are better than what consensus is expecting right now.
ANDREW: Thank you very much, Stewart. Really appreciate it. Stewart Glickman, analyst at CFRA.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| BKR NASDAQ | N | N | N |
| LNG NYSE | N | N | N |
| FANG NASDAQ | N | N | N |
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This BNN Bloomberg summary and transcript of the Dec. 8, 2025 interview with Stewart Glickman are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.