Although energy stocks hit record highs, their valuation is still the lowest in the S&P 500 index. According to industry research, Wall Street previously believed that the sector's profit recovery was only short-lived, causing it to fail to obtain a valuation premium, but the current valuation fully reflects this pessimistic expectation. As oil prices continue to rise, analysts expect there is still room for further increases. According to the data, it is expected that by the end of 2027, the operating profit margin of the energy industry will fall back to 15%, but it is still significantly higher than about 9% before the outbreak of the war in Iran. Furthermore, the sector has a negative beta coefficient in the S&P 500 index, which can provide defensive protection against large market sell-offs caused by rising oil prices.

Although energy stocks hit record highs, their valuation is still the lowest in the S&P 500 index. According to industry research, Wall Street previously believed that the sector's profit recovery was only short-lived, causing it to fail to obtain a valuation premium, but the current valuation fully reflects this pessimistic expectation. As oil prices continue to rise, analysts expect there is still room for further increases. According to the data, it is expected that by the end of 2027, the operating profit margin of the energy industry will fall back to 15%, but it is still significantly higher than about 9% before the outbreak of the war in Iran. Furthermore, the sector has a negative beta coefficient in the S&P 500 index, which can provide defensive protection against large market sell-offs caused by rising oil prices.