Hakyung Kim
March 27, 2025
CNBC
Liberty Energy could emerge as a winner ( MACRO CLUE REGARDING THE FUTURE OF AI) as data center power demand grows, according to Morgan Stanley.
The bank upgraded the stock to overweight from equal weight. Its new price target of $25, up from $20, implies shares could gain 68% from Wednesday’s close.
“LBRT is a way to play the data center/power demand growth theme at an undemanding price,” wrote analyst Daniel Katz. “Our colleagues have recently flagged expectations for a ~40GW power shortfall in meeting US data center demand alone by 2028, where LBRT’s [power generation services] biz could be part of the ‘time to power’ solution.”
Katz said he also prefers “premium players” such as Liberty Energy in the current North American shale completion market.
Shares are down more than 10% in March and are around 22.5% lower year to date. However, Katz says investors aren’t appreciating the company’s fracking supply attrition potential, adding that gas demand upside should give some pricing support.
In addition, the analyst noted that Liberty Energy has “historically out-earned peers due [to] high operational efficiency.” He believes the company is able to maintain this leading position moving ahead, as well as its early adopter position of new technology.
Analysts are split on the stock. LSEG data shows that six of 13 who cover Liberty Energy rate it as a buy or a strong buy, while the remaining seven assigned it a hold rating.