Oil prices have been very volatile over recent months and have fallen from the elevated levels since earlier this year. Prices could remain volatile due to a confluence of factors, including the Russia-Ukraine War, the COVID-19 situation in China, and a potential global recession. Amid this uncertain backdrop, we used TipRanks’ Stock Comparison Tool to pit EOG Resources (NYSE:EOG), SLB (NYSE:SLB), and Chevron (NYSE:CVX) against each other to pick the most attractive energy stock according to Wall Street analysts.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
EOG Resources (NYSE:EOG) Stock
EOG is one of America’s leading crude oil and natural gas exploration and production companies. Last month, the company reported mixed third-quarter results, with revenue topping estimates but earnings lagging expectations. EOG’s adjusted EPS increased about 72% to $3.71, while revenue surged 59% to $7.6 billion.
EOG is well-positioned to deliver solid growth over the long term, backed by its growing multi-basin portfolio. With the addition of the Utica Combo in Ohio, the company is now operating seven premium resource basins. EOG is focusing on lowering its costs and driving efficiencies to mitigate the impact of high inflation.
Is EOG a Good Stock to Buy?
Recently, Truist analyst Neal Dingmann lowered his price target for EOG Resources stock to $146 from $152 and reiterated a Buy rating. The analyst cut the price target to reflect a “worst case cost inflation to the company” in 2023. Nonetheless, Dingmann believes that EOG will continue to take measures to fight inflation. He is optimistic about the company having “one of the more linear growth levels, which should appeal to investors.”
Overall, Wall Street has a Strong Buy consensus rating for EOG Resources stock based on 17 Buys and four Holds. The average EOG stock price target of $156.65 implies 24% upside potential. Shares have rallied 47% year-to-date. The company’s forward dividend yield stands at 2.6%.
SLB (NYSE:SLB) Stock
SLB (previously called Schlumberger) is one of the leading oilfield services companies. It provides technology and solutions for reservoir characterization, drilling, production, and processing to the global energy industry.
Strong global activity, mainly in the offshore and international markets, drove a 28% rise in SLB’s Q3 revenue to $7.5 billion. Adjusted EPS grew 75% to $0.63. The company anticipates Q4 revenue growth in the mid-20s and EBITDA margin to expand by 200 basis points from the prior-year quarter. SLB is using its solid cash flows to bring down debt levels and strengthen the balance sheet.
Despite near-term volatility, SLB expects resilient upstream investment due to the growing focus on energy security and the need for supply-source diversification. The company sees continued momentum in offshore and international markets. Interestingly, SLB anticipates strong activity in the Middle East in the upcoming quarters.
What is the Target Price for SLB Stock?
Earlier this month, Raymond James analyst James Rollyson initiated coverage of SLB stock with a Buy rating and a price target of $65. Rollyson noted that capital discipline and asset rationalization in the oilfield service sector have limited the pace at which the industry could ramp up amid high demand. He believes that this situation “portends a more bullish set up for a longer cycle with sustained free cash flow generation.” It would also lead to an extended period of strong margins.
All in all, SLB earns a Strong Buy consensus rating based on 18 unanimous Buys. The average SLB stock price target of $59.76 implies 12.8% upside potential. Shares have jumped by a staggering 77% so far this year.
Chevron (NYSE:CVX) Stock
Integrated oil and gas giant Chevron had a stellar run this year due to high energy prices. Revenue grew 66% to $189.8 billion in the first nine months of 2022, while adjusted EPS surged about 165% to $14.74. Robust cash flows helped the company boost shareholder returns, increase strategic investments, and lower its debt levels.
Despite the ongoing volatility, Chevron continues to make significant investments to boost both traditional and new energy supplies. CVX expects capital expenditure of $17 billion in 2023 (including affiliate capex), of which over $4 billion is allocated to Permian Basin development.
Is Chevron a Buy, Sell, or Hold?
Recently, Piper Sandler analyst Ryan Todd lowered his price target for Chevron stock to $199 from $206 and reiterated a Buy rating. Despite “two years of outperformance,” Todd remains constructive on the energy space heading into 2023. The analyst expects the ongoing cycle to continue due to supply constraints and sustained capital discipline. Todd feels that refining could “lead the charge” next year, with persistent tightness in product markets supporting margins to the levels seen in 2022.
While Todd remains bullish on Chevron, Wall Street is sidelined on the stock. The Hold consensus rating for Chevron stock is based on five Buys, six Holds, and two Sells. The average CVX stock price target of $187.69 suggests a limited upside potential of 5.8% from current levels following a strong rally of over 51% this year.
Conclusion
The ongoing global uncertainty makes it difficult to predict the direction of energy prices in 2023. Nonetheless, Wall Street analysts are bullish about EOG Resources and SLB, while they are sidelined on Chevron stock. Analysts see higher upside potential in EOG Resources stock in the year ahead.
As per TipRanks Smart Score System, EOG earns a “Perfect 10”, which indicates that the stock has the potential to outperform the broader market.
