Deep Dive

Wall Street sees as much as 70% upside for these highly rated energy stocks in rally mode

Crude oil shot up more than 3% in only one day amid rising demand and a supply disruption, while many oil and gas stocks were up even more

Stock and commodity markets indicate we're nowhere near a sunset for fossil fuels. (Getty Images)

Referenced Symbols

Some investors might feel guilty about making money on fossil fuels, but the table appears set for more gains in energy-stock prices.

Take a look at this chart showing price movement for continuous forward-month West Texas intermedia crude oil CL00 contracts over the past year:

FactSet

WTI was up 3.3% early on Sept. 15 to $72.78 a barrel — quite a bump for only one trading session. And among the 32 energy stocks listed below, all but one were up in morning trading, with gains of as much as 6.9%.

WTI has risen 90% over the past year. But to put that into perspective, it actually peaked at a much higher intraday price of $112.24 on Aug. 28. 2013, before its long decline to a low of $26.05 on Feb. 11, 2016. Then it rose has high as $76.90 before its pandemic crash. You probably remember that moment in in April of 2020 when forward-month oil futures briefly dropped into negative territory amid the pandemic disruption. Now, with increasing demand for oil and natural gas as the world economy recovers from the COVID-19 slowdown, along with temporary disruptions in oil and natural gas production in the Gulf of Mexico and the disruption of wind electricity generation in the North Sea as Europe heads into home heating season, the table is set for a continued increase in energy commodity prices.

Read: EIA reports a more than 6 million-barrel weekly drop in U.S. crude supplies

Deeper dive into oil and natural gas stocks

Last week, as part of the eLesor Premium series, we looked at energy partnerships and the 30 oil stocks included in the Russell 1000 Index RUI. Now it’s time to expand the screen to the 108 energy stocks included in the Russell 3000 index. The Russell 3000 represents about 98% of the U.S. stock market.

Among the 108 energy stocks, 89 are covered by at least five analysts polled by FactSet. This is a reasonable cut-off, for a variety of opinions.

Among the 89 remaining energy stocks, 32 are rated “buy” or the equivalent by at least 75% of analysts. Here they are, sorted by the 12-month upside potential implied by consensus price targets, with dividend yields on the right:

Company Industry Price – 10:15 a.m. ET on Sept. 15, 2021 Price change – Sept. 15 Share “buy” ratings Consensus price target Implied 12-month upside potential Dividend yield
Earthstone Energy Inc. Class A ESTE Integrated Oil $8.65 3.7% 86% $14.71 70% 0.00%
Renewable Energy Group Inc. REGI Chemicals: Specialty $49.45 3.3% 81% $83.00 68% 0.00%
Falcon Minerals Corp. Class A FLMN Integrated Oil $4.50 1.8% 75% $6.73 49% 8.82%
Penn Virginia Corp. PVAC Oil & Gas Production $21.57 6.7% 80% $32.00 48% 0.00%
National Energy Services Reunited Corp. NESR Oilfield Services/ Equipment $11.99 3.1% 100% $17.58 47% 0.00%
Dorian LPG Ltd. LPG Marine Shipping $11.67 -0.2% 75% $17.00 46% 0.00%
Diamondback Energy Inc. FANG Oil & Gas Production $80.03 5.7% 91% $113.94 42% 2.38%
Northern Oil and Gas Inc. NOG Oil & Gas Production $18.30 3.6% 100% $26.04 42% 1.02%
PDC Energy Inc. PDCE Oil & Gas Production $43.95 6.9% 88% $60.88 39% 1.17%
Talos Energy Inc. TALO Oil & Gas Production $13.49 4.8% 100% $18.29 36% 0.00%
Green Plains Inc. GPRE Chemicals: Specialty $34.23 1.7% 90% $46.10 35% 0.00%
EOG Resources Inc. EOG Oil & Gas Production $73.56 5.8% 75% $98.95 35% 2.37%
Bonanza Creek Energy Inc. BCEI Integrated Oil $45.60 5.7% 100% $60.50 33% 3.25%
NexTier Oilfield Solutions Inc. NEX Oilfield Services/ Equipment $4.31 6.4% 89% $5.72 33% 0.00%
Matador Resources Co. MTDR Oil & Gas Production $30.27 4.9% 79% $39.71 31% 0.35%
Devon Energy Corp. DVN Oil & Gas Production $29.49 4.3% 85% $38.42 30% 4.39%
Pioneer Natural Resources Co. PXD Oil & Gas Production $159.07 4.0% 83% $206.79 30% 1.46%
ConocoPhillips COP Oil & Gas Production $59.19 3.9% 97% $75.44 27% 3.02%
Valero Energy Corp. VLO Oil Refining/ Marketing $65.68 1.5% 86% $83.41 27% 6.06%
Oasis Petroleum Inc. OAS Oil & Gas Production $97.53 4.4% 86% $123.71 27% 1.60%
Denbury Inc. DEN Integrated Oil $70.29 5.0% 83% $87.82 25% 0.00%
Schlumberger Ltd. SLB Oilfield Services/ Equipment $28.89 4.4% 80% $35.90 24% 1.81%
Marathon Petroleum Corp. MPC Oil Refining/ Marketing $58.91 2.3% 84% $70.00 19% 4.03%
ChampionX Corp. CHX Chemicals: Specialty $23.50 4.2% 80% $27.72 18% 0.00%
Targa Resources Corp. TRGP Oil Refining/ Marketing $45.72 3.4% 83% $53.48 17% 0.90%
Cactus Inc. Class A WHD Oilfield Services/ Equipment $36.47 3.9% 80% $42.56 17% 1.14%
Chesapeake Energy Corp. CHK Integrated Oil $64.68 4.8% 75% $75.00 16% 2.23%
Cheniere Energy Inc. LNG Oil & Gas Pipelines $91.26 3.1% 96% $105.05 15% 1.49%
Williams Cos. WMB Oil & Gas Pipelines $25.39 2.6% 83% $29.05 14% 6.63%
Baker Hughes Co. Class A BKR Oilfield Services/ Equipment $25.15 3.3% 90% $28.24 12% 2.96%
Whiting Petroleum Corp. WLL Oil & Gas Production $55.55 5.3% 75% $62.13 12% 0.00%
Energy Fuels Inc. CA:EFR Other Metals/ Minerals $10.04 5.9% 100% $9.73 -3% 0.00%

Click on the tickers for more about each company. A stock screen is only a starting point, and the eLesor quote page can be an excellent start for your own research. Click here for Tomi Kilgore’s new, detailed guide to the wealth of information available for free on the quote page.

Wall Street analysts use 12-month price targets, but that can actually be a short period for a long-term investor. The last stock on the list, Energy Fuels Inc. CA:EFR, has unanimous “buy” ratings but has gotten ahead of its price target.

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