Liberty Energy (LBRT): Revisiting Valuation After Fresh Bullish Analyst Coverage Boosts Sentiment

Liberty Energy (LBRT) is back in the spotlight after UBS kicked off coverage with a bullish stance, adding its voice to upbeat views from Citigroup and RBC Capital and sharpening investor focus on the stock.

See our latest analysis for Liberty Energy.

Those bullish calls land as Liberty Energy trades around $19.40, with a strong 90 day share price return of 93.61 percent contrasting with a softer year to date share price return and a still solid 1 year total shareholder return of 14.10 percent, suggesting momentum is rebuilding after a choppy stretch.

If this upswing has your attention, it could be a good moment to see what else is breaking out in energy and adjacent services via fast growing stocks with high insider ownership.

Yet despite that bullish analyst chorus, Liberty Energy now trades slightly above the average price target, and recent earnings growth is mixed. This raises the question: is this renewed momentum a buying opportunity, or has the market already priced in future gains?

Most Popular Narrative Narrative: 7.8% Overvalued

With Liberty Energy closing at $19.40 against a narrative fair value of $18.00, the current price already leans ahead of the story it outlines.

Analysts have increased their fair value price target for Liberty Energy from $16.92 to $18.00 per share, citing improved revenue growth and expanding profit margins. This comes despite a softer market outlook for completions activity.

Read the complete narrative.

Want to see how modest revenue growth, shrinking margins and a surprisingly rich future earnings multiple still add up to a higher fair value? The full narrative walks through the precise forecasts, the discount rate used, and the long range earnings math that try to justify today’s premium.

Result: Fair Value of $18.00 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, several clouds hang over that storyline, including softer completions demand and a delayed earnings impact from long lead time power and nuclear projects.

Find out about the key risks to this Liberty Energy narrative.

Another Lens on Valuation

While the narrative fair value suggests Liberty Energy is modestly overvalued, its current price to earnings ratio of 16.9x paints a more nuanced picture. The stock trades cheaper than the US Energy Services industry at 18.3x and well below peers at 33.1x, yet looks expensive against a fair ratio of 6.1x that our models suggest the market could drift toward over time.

This gap hints at either upside if the sector rerates higher, or painful multiple compression if earnings disappoint and the market moves closer to that fair ratio. Investors are left to decide which future seems more realistic.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Liberty Energy Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom Liberty Energy view in just minutes, Do it your way.

A great starting point for your Liberty Energy research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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