Do Wall Street Analysts Love These Integrated Energy Stocks?

Analysts’ top three picks

In this series, we’ll rank seven global integrated energy companies based on the number of “buy” ratings they’ve received from Wall Street analysts.

Do Wall Street Analysts Love These Integrated Energy Stocks?

Suncor Energy (SU), Royal Dutch Shell (RDS.A), and Chevron (CVX) are the three companies that have received more than 70% “buy” ratings from analysts. All three have strengths that make them unique. Suncor, which is in the business of extracting oil from oil sands, has seen a notable improvement in its financial position over the past few quarters. Suncor has an implied gain of 16% based on its mean target price.

Shell’s focus on debt reduction strengthened its financial position in the second quarter. Also, Shell’s capex activities are helping it to move forward on its strategic growth path. Similarly, with its second-best debt position in the industry and its growing integrated earnings model, Chevron is all set to witness a rise in earnings in the near future. Shell’s and Chevron’s implied gains stand at 22% and 23%, respectively.

Other stocks’ implied gains

Analysts have assigned a relatively low number of “buy” ratings to BP (BP), ExxonMobil (XOM), and Petrobras (PBR). Total (TOT) has received “buy” ratings from 67% of analysts.

PBR’s mean target price implies a 32% gain from its current level, the highest among the seven stocks under review. However, TOT has implied gains of ~6%—the lowest among the seven stocks under review. BP and XOM have implied gains of between 10% and 15%.

Most integrated energy stocks’ implied gains have increased in the past year on account of steeper rises in their mean target prices compared to the increases in their stock prices. We’ll discuss this later in the series.

From the next article onward, we’ll review analysts’ ratings for each of the above companies starting with Suncor.