Another day, another big move in the benchmark price of oil. As we have noted recently here at 24/7 Wall St., despite the massive price gains of both West Texas Intermediate and Brent crudes since the end of 2018, most of the stocks in exploration and production and in oilfield services have lagged this swing higher.
With the busy summer driving season right around the corner, and some hints that economies in both Europe and China may be improving, there is a good chance that while the big moves higher in oil may slow, the potential for some of the top stocks in the sector remains very likely.
The energy team at Stifel is very positive on the current direction of the energy sector, so we screened the firm’s energy universe research coverage looking for stocks rated Buy with the biggest upside to the Stifel assigned price target. We found five with massive, triple-digit upside potential that could be great additions to growth portfolios now.
This energy stock has been obliterated and may have massive upside. Chaparral Energy Inc. (NASDAQ: CHAP) engages in the onshore oil and natural gas acquisition, exploitation, exploration and production. It focuses on deposits of Stack, Meramec and Osage, Oswego and Woodford, located in Oklahoma and the Texas Panhandle. As of March 29, 2018, it had estimated potential reserves of a billion barrels of oil equivalent.
Chaparral announced recently that it anticipates 2019 total company production to be between 25,000 and 27,000 barrels oil equivalent per day, which represents an anticipated 22% to 32% year-over-year growth. Total Stack production is expected to be between 21,000 and 23,000 barrels oil equivalent per day, which would be a year-over-year growth rate of 45% to 59%. While full-year production will have significant growth, first-quarter production will be impacted by the timing of first sales associated with Chaparral’s current spacing tests and remaining drilling joint venture wells.
Stifel has a gigantic $22 price target on the shares, which is even higher than the huge $18.38 Wall Street consensus target. The shares were last seen trading on Monday at $5.51.
Carrizo Oil & Gas
This is a top energy stock for value buyers to consider. Carrizo Oil & Gas Inc. (NASDAQ: CRZO) is a Houston-based energy company actively engaged in the exploration, development and production of oil and gas from resource plays located in the United States. Carrizo’s current operations are principally focused in proven, producing oil and gas plays, primarily in the Eagle Ford Shale, the Utica Shale in Ohio, the Niobrara Formation in Colorado and the Marcellus Shale in Pennsylvania.
Many on Wall Street see the company as one of the best positioned due to the low breakeven costs, solid operating scale and a very good balance sheet with ample liquidity. Top analysts also think the company may take advantage of difficult situations for others and make acquisitions, especially in the Eagle Ford.
The Stifel price target on the stock is a stunning $44, while the consensus target is down at $19.30. The stock closed most recently at $13.45 a share.