Crude Awakening: 5 Oil Stocks Poised For Growth As Global Output Tightens
Portfolio Pulse from Piero Cingari
US oil stocks are set to benefit from a tightening global crude market due to recent OPEC+ summit outcomes. Saudi Arabia's commitment to additional output cuts and the extension of voluntary cutbacks by OPEC+ nations have created a favorable outlook for oil prices. Goldman Sachs reiterates its December 2023 price projection of $95 per barrel. Five US oil stocks poised for growth are Valero Energy Corp. (VLO), Marathon Oil Corp. (MRO), Occidental Petroleum Corporation (OXY), Callon Petroleum Corp. (CPE), and HighPeak Energy, Inc. (HPK).
June 05, 2023 | 2:35 pm
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POSITIVE IMPACT
Callon Petroleum has a low forward P/E ratio of 3.8x and is one of the most shorted oil stocks in the US. Rising oil prices may result in a short squeeze, driving the stock price higher.
Callon Petroleum's low valuation and high short interest make it a prime candidate for a short squeeze, which could drive the stock price higher. The favorable outlook for oil prices due to OPEC+ summit outcomes further supports potential growth.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
HighPeak Energy trades 63% lower than its 52-week highs and is down 41% year to date. The company has a low forward P/E multiple of 4.5x, a high EBITDA margin of 78%, and a large gap versus the median analyst target (195%).
HighPeak Energy's low valuation, high EBITDA margin, and large gap versus the median analyst target make it an attractive investment opportunity. The favorable outlook for oil prices due to OPEC+ summit outcomes further supports potential growth.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Marathon Oil is undervalued relative to Wall Street analyst predictions, with a 41% gap between current prices and the median analyst target. The company has a nearly 70% EBITDA margin.
Marathon Oil's undervalued status and high EBITDA margin make it an attractive investment opportunity. The favorable outlook for oil prices due to OPEC+ summit outcomes further supports potential growth.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Occidental Petroleum has a forward P/E ratio of 11, an EBITDA margin of 54%, and trades at a 13% discount to the median analyst price target. Warren Buffett's Berkshire Hathaway owns approximately 23% of the company.
Occidental Petroleum's attractive valuation, EBITDA margin, and backing from Warren Buffett's Berkshire Hathaway make it a strong candidate for growth. The favorable outlook for oil prices due to OPEC+ summit outcomes further supports potential growth.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Valero Energy has an appealing valuation among US energy stocks, trading at 6.5 times its predicted earnings for the next year. Its performance year to date is negative by 14%.
Valero Energy's low valuation and the favorable outlook for oil prices due to OPEC+ summit outcomes make it a strong candidate for growth. The company's negative YTD performance also indicates potential for a rebound.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100