Nobody knows when oil prices will rebound. About the only thing most analysts agree on is that eventually they will.
Now might be a good time to begin scouting out bargains and “most likely to succeeds.” First, a quick take on why many analysts see a rise in oil prices as soon as this year.
Growing demand in the East, including not only China but India and Vietnam will spark demand, according to Stephen Leeb, president of Leeb Asset Management and publisher of The Complete Investor newsletter.
Stewart Glickman, analyst at S&P Capital IQ, predicts a range of $30 to $50 a barrel for WTI in 2016. Although Glickman expects non-OPEC production growth (year-over-year) to roll into negative territory sometime in 2016, he said a major supply shock and a depreciating U.S. dollar could upend that theory.
Meanwhile here are a dozen energy sector stocks analysts like for the upcoming year.
A “Buyer’s” Dozen
At least 70% of analysts polled by FactSet rated the following stocks a “buy.”
Oil and gas producer, Anadarko Petroleum Corp. (NYSE:APCC) , has a consensus analyst target of $79.30, an implied 12-month potential upside of 59% and was rated “buy” by 79% of analysts polled by FactSet.
Oilfield services equipment provider, Baker Hughes Corp. Stock not found BHI has a consensus price target of $67.00 and received a “buy” rating from 76% of analysts polled by FactSet.
Pioneer Natural Resources Co. (NYSE:PXDC), a producer, has a consensus price target of $164.78 an implied 12-month potential upside of 32%. PXD garnered a “buy” rating by 73% of analysts polled by FactSet.
Another refiner, Valero Energy Corp. (NYSE:VLOA) has a consensus price target of $79.11 and an 11% implied 12-month potential upside. An impressive 81% of FactSet polled analysts rated Valero a “buy.”
A recent Jefferies research note included RSP Permian (:RSPPN/A) (along with Anadarko Petroleum and Pioneer) in its short list of stocks to buy pending a return to $50 oil. Jefferies and others believe the company could be a takeover target.
Jefferies price target for RSP Permian is $33. The consensus is $31.90 according to 24/7 Wall St.
Finally, in the “odd man out” department, Stewart Glickman continues to maintain a "buy" rating on Exxon Mobil Corp. (NYSE:XOMC). He did reduce his target from $96 to $88 and cut his earnings projection for 2016 to $2.90.