Morgan Stanley Cuts Q4 Brent Forecast to $80, Urges Energy Stock Buy
MS•Morgan Stanley analysts cut Q4 Brent forecast from $90 to $80 per barrel and see Q3 Dated Brent at $90, down from $100 previously. The firm recommends buying energy stocks after a 29% WTI decline, forecasting a 13% median 2027 free cash flow yield at $72 strip pricing.
1. Oil Forecast Revision
Morgan Stanley lowered its Dated Brent forecast for Q3 to $90 per barrel, down from $100, and cut Q4 guidance to $80, citing faster-than-expected Persian Gulf export resumption under a US-Iran interim deal. Analysts expect 50% of lost production to return by September, 80% by December and full volumes in early 2027.
2. Energy Sector Recommendation
Analyst Devin McDermott highlighted a 29% drop in WTI since the ceasefire, noting current valuations price in WTI at about $66 versus a 12-month strip near $75. At strip pricing of $72, Morgan Stanley projects a 13% median free cash flow yield for US E&P companies in 2027, recommending adding Majors and high-quality producers.
3. Investor Interest in MS Stock
Morgan Stanley has appeared as a trending stock on investor platforms, reflecting heightened user engagement and interest in the firm’s research calls and market outlook ahead of key earnings and global policy developments.
