Citi Research Global Technology, Communications, Real Estate, Energy, and Industrials February 23, 2026 Data Center GAINs (Gen AI Names) Multi-Asset Strong Absorption Supports Solid 2026 and LT Data Center Demand | Equities | | | | | ABS | | --- | --- | --- | --- | --- | --- | | Michael Rollins, CFAAC +1 212 816-3116 | Heath TerryAC +1 212 723-4624 | Caitlyn Walsh caitlyn.walsh@citi.com | | | | | michael.rollins@citi.com | heath.terry@citi.com | | | | | | Siraj Ahmed AC | AC Scott Gruber | Andrew KaplowitzA ...

Liberty Energy Inc. (NYSE:LBRT) is among the 15 Undervalued Momentum Stocks That Are Taking Off. Citi increased its price target on Liberty Energy Inc. (NYSE:LBRT) to $32 from $21, according to a report on February 17. The firm cited two reasons for this revision: first, its confidence that the company will achieve and exceed the 2029 capacity target of 3 gigawatts (GW), driven by strong demand from hyperscale companies. Second, the company’s competitive positioning amid the increasing need to make reside ...

“It seems like the momentum stocks that have got us here still remain in favor with our customers.” This was highlighted by Steve Sosnick, Chief Strategist at Interactive Brokers, in a late December 2025 interview with CNBC. Sosnick said the market environment is marked by continuous retail inflows, while citing data from his firm’s platform. According to this data, in most weeks, the vast majority of the 25 most actively traded stocks on the platform are net buys, meaning more clients are buying than selli ...

Core Insights - Liberty Energy Inc. (LBRT) has achieved a 28.4% increase in share price over the past month, significantly outperforming its sector's gain of 11.7% and sub-industry's rise of 14.7%, indicating strong relative strength and favorable positioning for investors to monitor closely [1] Company Overview - Liberty Energy is a leading North American oilfield services company specializing in hydraulic fracturing, wireline, proppant delivery, sand mining, and natural gas solutions across major North American shale basins [4] - The company operates approximately 40 active frac fleets and focuses on next-generation technologies such as digiFleets and dual-fuel systems to enhance efficiency and reduce emissions [4] - Liberty Energy is expanding into distributed power generation for data centers and industrial customers through Liberty Power Innovations (LPI), positioning itself as an innovation-driven completions leader [4] Growth Factors - Liberty Energy's LPI platform aims for about 3 gigawatts of deployment by 2029, primarily targeting hyperscale data centers, with secured firm reservations including a 1 GW framework agreement and additional 330 MW commitments [6] - The company's gas recip-based power solution is competitive with current grid pricing and is expected to become structurally cheaper over time, providing predictable pricing through long-term Energy Services Agreements (ESAs) [7][8] - Investment in AI-driven automation and technologies has led to a 14% reduction in maintenance costs per unit of work, enhancing operational efficiency and market share defense [9] Financial Strategy - In 2025, Liberty Energy returned $77 million to shareholders through dividends and buybacks while maintaining $281 million in liquidity and moderate net debt [10] - Project-level financing is expected to support much of the power expansion, preserving financial flexibility and limiting corporate leverage [10] Challenges - The company's distributed power strategy requires significant upfront capital in 2026, with meaningful EBITDA contributions not expected until 2027, creating a near-term cash flow gap [11] - Management anticipates a decline in adjusted EBITDA for 2026 due to frac pricing resets and increased development costs, with margin compression expected [12] - Liberty Energy remains exposed to volatile oilfield services pricing, with potential impacts on fleet utilization and margins if oil prices weaken [13] Conclusion - Liberty Energy's strong positioning in North American completions and excitement around its distributed power platform support a positive long-term outlook, despite near-term challenges related to EBITDA decline and exposure to commodity volatility [15][16]

Core Viewpoint - Liberty Energy Inc. has announced the pricing and agreement to sell $700.0 million of 0.00% convertible senior notes due 2031 in a private offering to qualified institutional buyers [1] Group 1 - The offering is conducted under Rule 144A of the Securities Act of 1933 [1] - Liberty has granted initial purchasers an option to purchase additional notes [1]

Core Viewpoint - Liberty Energy Inc. is proposing to offer $500 million in aggregate principal amount of convertible senior notes due 2031, subject to market conditions and other factors, in a private offering to qualified institutional buyers [1] Group 1 - The offering is categorized as a private offering under Rule 144A of the Securities Act of 1933 [1] - The company intends to grant the initial purchasers a 30-day option to purchase up to an additional $75 million principal amount of the Notes [1]

Debt and Financial Obligations - As of January 28, 2026, the company had $275.0 million outstanding under its Revolving Credit Facility, with $175.7 million of remaining availability[173]. - The company had $246.7 million of debt outstanding as of December 31, 2025, with a weighted average interest rate of 6.6%[303]. - A 1% increase or decrease in the weighted average interest rate would impact interest expense by approximately $2.5 million per year[303]. - The company may incur substantial additional debt, which could limit its flexibility in planning and reacting to industry changes[178]. Operational Risks - The company's ability to retain customers is highly dependent on its safety performance, which could adversely impact revenues if safety records deteriorate[175]. - The company operates two sand mines in the Permian Basin, facing risks such as environmental compliance and obtaining necessary permits[183]. - The company is subject to stringent health and safety standards under the Federal Mine Safety and Health Act, which could materially affect operations if not complied with[186]. - The company faces potential litigation regarding intellectual property rights, which could result in substantial damages or operational restrictions[179]. - Seasonal weather conditions and natural disasters could disrupt operations and adversely impact financial results[182]. Market and Commodity Risks - A material decline in oil and natural gas prices could significantly affect demand for the company's services and overall financial condition[302]. - The company is exposed to commodity price risk due to material and fuel purchases, with costs including inventory for completions services and diesel fuel and natural gas for equipment[304]. Foreign Currency Impact - The company recorded a foreign currency translation gain of $5.9 million in 2025 and a loss of $13.7 million in 2024, impacting comprehensive income[305].

Core Viewpoint - Liberty Energy Inc. is a significant player in the energy sector, focusing on hydraulic fracturing services and emphasizing technological advancements and operational efficiency [1] Financial Performance - Liberty Energy reported earnings per share (EPS) of 5 cents for the fourth quarter of 2025, exceeding the Zacks Consensus Estimate of a loss of 16 cents, although down from 10 cents the previous year [3][6] - The company's revenue for Q4 2025 reached $1 billion, surpassing the Zacks Consensus Estimate of $862 million and marking a 10% increase from $944 million in the prior year [3][6] Market Position and Stock Performance - Liberty Energy's stock is currently priced at $24.65, reflecting a decrease of 2.72%, with a market capitalization of approximately $3.99 billion [5] - The stock has fluctuated between a low of $23.90 and a high of $25.47 during the day, and over the past year, it has reached a high of $27.21 and a low of $9.50 [5] Strategic Initiatives - The company's growth is driven by activity levels that significantly outpace the industry, along with strategic expansions in its energy infrastructure platform and new power deals [4] - Liberty Energy approved a 9-cent per share dividend in the fourth quarter, contributing to positive sentiment around the stock [4] Analyst Outlook - Stephen Gengaro from Stifel Nicolaus set a price target of $28 for Liberty Energy, indicating a potential upside of approximately 13.59% from the current stock price [2][6]

Group 1 - Liberty Energy Inc. (NYSE: LBRT) experienced an 18.28% week-on-week gain, reaching an all-time high due to a positive business outlook and expectations of stronger power demand [1][2] - The stock peaked at $27.21 before closing at $24.65 after a 2.68% decline due to profit-taking [2] - CEO Ron Gusek projected that power demand would increase more than threefold over the next four years, and announced plans to deploy 3 gigawatts of power by 2029 to meet this demand [2] Group 2 - Despite the optimistic outlook, Liberty Energy reported a 53% decline in net income for 2025, falling to $147.87 million from $316 million in 2024, and a 7.2% drop in revenues to $4 billion from $4.3 billion year-on-year [3] - In Q4, net income plummeted by 74% to $13.69 million from $51.89 million, even though revenues exceeded $1 billion, reaching $1.04 billion, which is a 10% increase from $943 million in the same period last year [3]

Group 1 - Liberty Energy Inc. (NYSE:LBRT) experienced a significant share price increase of 17.81% from January 22 to January 29, 2026, making it one of the top-performing energy stocks for that week [1] - The company reported better-than-expected Q4 2025 results, surpassing estimates in both earnings and revenue, with a total revenue of $4 billion for the full year and an adjusted EBITDA of $634 million [3] - Liberty Energy returned $77 million to shareholders through quarterly cash dividends and share repurchases during the year, and declared a cash dividend of $0.09 per share for holders of record as of March 4, 2026 [3] Group 2 - The company has a positive outlook on increasing power demand, announcing plans to deploy 3 GW of power by 2029, building on previous plans for over 1 GW capacity by the end of 2027 [4]