Here Are Analysts’ Top 10 Integrated Energy Picks


Dec. 12 2017, Updated 3:15 p.m. ET

Analyst ratings for integrated energy firms

In this series, we’ll rank the top ten global integrated energy firms based on the “buy” ratings received from Wall Street analysts. Then we’ll delve into the individual performance of these integrated companies.

YPF (YPF), Royal Dutch Shell (RDS.A), and Suncor Energy (SU) are the top three firms that have received more than 70% “buy” ratings from analysts. The bottom three of the top ten firms include Petrobras (PBR), ExxonMobil (XOM), and Total (TOT). These firms have received less than 50% “buy” ratings. The middle stocks consist of Chevron (CVX), Cenovus Energy (CVE), BP (BP), and ENI (E). These firms have 50% to 70% “buy” ratings from analysts.

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Top three integrated energy firms’ implied gains

Considering the top three stocks, YPF has the highest implied gain of 29% based on its mean target price. Shell and Suncor have relatively low implied gains below 20%.

All three have strengths that make them unique. For example, Shell’s BG Group acquisition has helped it boost its strategic growth path. YPF is a unique integrated energy company with the regulated domestic oil and gas industry promoting exploration and production of hydrocarbons. Suncor is in the business of extracting oil from oil sands with notable improvement in its operating cost structure in the past few quarters.

Implied gains on other stocks

CVE’s mean target price implies a 17% gain from the current level, the second highest compared to peers. However, leading firms in the integrated space like Chevron (CVX), BP (BP), and ExxonMobil (XOM) have implied gains of less than 5% based on their mean target prices. BP’s stock price has risen sharply compared to the rise in its mean target price in the past one year, squeezing its implied gains. In contrast, CVX’s implied gains expanded with a steeper rise in its mean target price compared to a rise in the stock price. However, XOM has fallen steeply compared to the decline in its mean target price in the past one year. We’ll discuss this later in the series.

Integrated energy firms like Total (TOT) trade at almost the same level as their mean target price. Also, ENI (E) trades just 3% above its current market price.

In the next parts, we’ll look at analyst ratings for each of the above firms beginning with YPF.


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