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Dear Fellow Investor,
Falling Oil Prices Could Be a Hidden Gift for These 3 Stocks
Falling oil prices often trigger concern for investors—especially those with exposure to energy stocks. But what if the same trend that hurts one corner of the market quietly boosts another?
That’s exactly what analysts at Jefferies believe is unfolding right now.
While West Texas Intermediate (WTI) crude oil traded near $80 per barrel at the start of the year, prices have since dropped to around $68—and Jefferies believes that trend could persist. While energy companies may suffer under this pressure, a falling oil environment often has positive ripple effects elsewhere in the market—particularly in the technology and consumer discretionary sectors.
In a recent note to clients, Jefferies highlighted a group of companies they believe are especially well-positioned to outperform if oil prices remain low. These companies benefit indirectly from reduced fuel and input costs, improved consumer spending capacity, or broader economic tailwinds that emerge when energy prices soften.
Here are three standout stocks Jefferies is betting on—and why lower oil prices could be the catalyst for their next leg higher.
Company: Yum! Brands, Inc. (SYM: YUM)
Recent Price: $147.40
Price Target: $163.27
Buy Ratings: J.P. Morgan, Barclays, Goldman Sachs
When consumers spend less on gas, they often feel more comfortable spending on dining and indulgences. That’s one of the reasons Jefferies is bullish on Yum! Brands, the global powerhouse behind Taco Bell, KFC, Pizza Hut, and Habit Burger Grill.
The company operates more than 50,000 restaurants across over 150 countries, making it one of the most recognizable players in the quick-service restaurant space. And with a primarily franchise-based model, Yum! enjoys high margins, scalable operations, and a relatively asset-light balance sheet.
Lower oil prices can be a meaningful tailwind for Yum! in two key ways:
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Lower delivery and logistics costs – Transportation is a major operating expense for franchisees, and when fuel costs fall, margins improve.
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Stronger consumer sentiment – Consumers with more discretionary income tend to dine out more frequently, boosting foot traffic and sales.
With consumer inflation moderating and fuel prices declining, Jefferies sees Yum! as a key beneficiary. Their average price target among firms with buy ratings is $163.27, offering solid upside from current levels.
InvestorPlace Media
Investing Legend Hints the End May be Near for These 3 Iconic Stocks
Futurist Eric Fry says Amazon, Tesla and Nvidia are all on the verge of major disruption. To help protect anyone with money invested in them, he's sharing three exciting stocks to replace them with. He gives away the names and tickers completely free in his brand-new "Sell This, Buy That" broadcast.
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Company: Zscaler, Inc. (SYM: ZS)
Recent Price: $283.15
Price Target: $313.51
Buy Ratings: J.P. Morgan, Needham, UBS
Zscaler may not be the first name that comes to mind when you think about oil prices—but its positioning in the cloud security space makes it a strong play in a lower-cost environment where companies are ramping up tech investments.
Zscaler provides secure access to cloud-based applications and data for enterprises around the globe. As a leader in Zero Trust architecture, its services are becoming mission-critical for businesses looking to modernize their IT infrastructure without compromising security.
Here’s why lower oil prices matter:
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Improved enterprise margins – When companies spend less on energy and logistics, they often reallocate those savings to areas like technology and cybersecurity.
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Stronger global macro conditions – Lower oil prices can support global growth, especially in oil-importing countries, which in turn fuels demand for SaaS and cloud solutions.
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Reduced recession risk – Tech stocks like Zscaler tend to outperform in more optimistic economic scenarios, which soft oil prices may help support.
Jefferies sees Zscaler as an ideal growth stock to own in this setup. They currently have an average price target of $313.51, roughly 11% above current levels. As cloud adoption and cybersecurity concerns continue to rise, Zscaler remains a compelling name with tailwinds beyond the oil trade.
Trading Tips
5 Small-Cap Stocks to Buy Now
Let’s be real. Large-cap blue chips don’t move the needle anymore.
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You don’t need to swing for the fences. You just need to step up to the plate with the right pitch.
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Company: Intuit Inc. (SYM: INTU)
Recent Price: $776.20
Price Target: $834.76
Buy Ratings: Morgan Stanley, Jefferies, Stifel Nicolaus
Intuit, the company behind TurboTax, QuickBooks, Credit Karma, and Mailchimp, is a quiet juggernaut of financial software—and it's one that Jefferies believes could quietly benefit from falling oil.
Intuit thrives in stable, consumer-friendly environments where small businesses grow, consumer finances are strong, and digital services see widespread adoption. When oil prices fall, that kind of environment is more likely to flourish.
Here’s how Intuit benefits:
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Small business health – Cheaper fuel costs improve the profitability of small and medium-sized businesses, especially in industries like delivery, field services, and logistics. This, in turn, increases demand for tools like QuickBooks and Mailchimp.
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Stronger consumer budgets – Consumers who save at the pump are more likely to use paid tools for financial planning, tax filing, or credit monitoring.
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Tech valuation resilience – In a lower-cost environment with tame inflation, high-quality tech companies like Intuit tend to regain favor with growth investors.
With an average price target of $834.76, INTU has the potential for moderate upside. Intuit’s recurring revenue model, strong brand, and diversified platform give it long-term resilience. And in an economy slowly recovering from inflation pressures, it may outperform as investors rotate back into high-quality growth.
Crypto 101
27 of crypto’s most successful reveal their buy list (free access)
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Are there any other stocks you think will benefit as oil prices fall? What other sectors of the market are you buying right now? Hit "reply" to this email and let us know your thoughts!
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