Analyzing the Relationship between Financial Performance and Stock Price Volatility in Energy Sector Companies: Evidence from the Oil, Gas, and Coal Subsectors Listed on the Indonesia Stock Exchange during 2022–2024

Abstract

This study examines the influence of financial performance on the stock prices of energy companies operating in the oil, gas, and coal sectors, whose share prices are often characterized by highly unpredictable fluctuations due to global conditions and international policy changes. Using data from 15 energy companies listed on the Indonesia Stock Exchange during the 2022–2024 period, selected through purposive sampling, the study employs multiple linear regression analysis preceded by classical assumption tests. The results indicate that the financial performance variables, namely Return on Assets (ROA), Debt-to-Equity Ratio (DER), and Price-to-Earnings Ratio (PER), collectively do not have a significant effect on stock price movements, with the model explaining only 13.7% of the observed variation. When analyzed individually, only Return on Equity (ROE) demonstrates a statistically significant influence, and the relationship is found to be negative, while the other variables show no significant contribution. Further investigation using a fishbone diagram and the 5 Why method reveals that stock price fluctuations are primarily driven by external factors, including global commodity price changes, government energy policies, international economic conditions, and geopolitical developments. These findings suggest that financial fundamentals alone are insufficient to explain stock price volatility in the energy subsector and highlight the importance of considering external environmental factors when making investment decisions and developing business strategies.