Bernstein Names Adnoc Gas And Fertiglobe Top Mena Energy Picks, Flags Strong Upside

(MENAFN- Khaleej Times) Bernstein has identified Adnoc Gas and Fertiglobe as its“Best Picks” in the Middle East and North Africa energy sector, arguing that both companies offer“quality at a discount” as the region's energy markets mature and deepen.

The assessment comes with the equity research firm's initiation of sell-side coverage on the Mena energy sector, where it highlighted the UAE's adaptive governance framework, sovereign-backed ownership models and strong visibility on cashflows across the energy value chain. These features, Bernstein said, have allowed the UAE to convert state-owned assets into investable platforms at pace, even amid heightened global uncertainty.

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In its report, Bernstein positioned the UAE as a clear outlier within energy markets, pointing to conservative fiscal foundations and long-term policy alignment as anchors of resilience. According to the firm, these characteristics have helped energy companies in the country maintain operational and financial stability during periods of geopolitical disruption and market volatility.

Adnoc Gas and Fertiglobe were cited as prominent examples of how the UAE's evolving energy and capital markets ecosystem has supported investable growth. Bernstein described Adnoc Gas as a cash-backed platform for long-term expansion, underpinned by contracted domestic gas supply and pre-sold LNG volumes that significantly reduce execution risk.

The research house initiated coverage on Adnoc Gas with an Outperform rating and a price target of Dh4.08 per share, implying upside of about 25 per cent from prevailing market prices as of April 9. An Outperform rating signals Bernstein's expectation that the stock will deliver returns above sector peers over time.

Bernstein's positive stance reflects what it sees as increasing market recognition of the durability and predictability of Adnoc Gas' cashflows. The firm highlighted the company's central role in anchoring the UAE's domestic gas supply through long-term, regulated-like contracts, as the country works towards gas self-sufficiency by 2030.

Fertiglobe, meanwhile, was identified as a structurally advantaged nitrogen producer, benefiting from low-cost gas feedstock, a geographically diversified asset base spanning the UAE, Egypt and Algeria, and strong free cashflow generation. Bernstein said these factors provide both operational resilience and a solid foundation for shareholder returns.

Coverage on Fertiglobe was also initiated with an Outperform rating, alongside a price target of Dh3.66 per share, the highest among analysts currently covering the stock. Based on the April 9 closing price of Dh3.06, the target suggests upside of roughly 20 per cent.

Bernstein said its valuation case for Fertiglobe is supported by expectations of structurally tight nitrogen markets beyond 2027, combined with the company's low-cost feedstock position and asset diversification, which offer flexibility in both production and exports. The firm also flagged longer-term upside potential from Fertiglobe's role within Adnoc's emerging global low-carbon ammonia strategy.

Beyond individual stock calls, the report focused on the broader transformation of Adnoc itself, describing its evolution from a vertically integrated national oil company into a modular ecosystem of listed subsidiaries. Bernstein said Adnoc's strategy of unbundling assets and attracting minority investors reflects the UAE's wider emphasis on flexibility, partnerships and capital markets–led growth.

According to the firm, this structure enables efficient capital recycling, improves transparency and accelerates market signalling, while allowing the state to retain strategic oversight and majority ownership of key assets.

Bernstein also highlighted the region's sovereign-led energy model, arguing that Mena governments increasingly act as active capital allocators. Through national champions and capital markets, resources are converted into long-term offtake agreements, stable cashflows and dividends, resulting in unusually high earnings visibility across upstream, midstream, downstream and regulated utility segments.

Bernstein operates out of major financial centres including New York and London, and is backed by Societe Generale and AllianceBernstein, which manages more than $850 billion in assets globally.

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