In this article, we will discuss the 12 Most Promising Energy Stocks According to Analysts.
With the world pivoting towards cleaner energy sources and facing political uncertainties, 2025 can be a critical year for the broader energy sector. As per GlobalData’s Power Predictions 2025 report, numerous themes are expected to shape the global power landscape in 2025. These include geopolitical shifts influencing supply chains, developments in EVs, energy storage, hydrogen, and nuclear power. As per the Short-Term Energy Outlook released by the US Energy Information Administration, the generation in the US electric power sector is expected to increase by 2% in 2025 and by 1% in 2026, after rising 3% last year, driven by growth in renewable energy sources.
What Lies Ahead for the US Energy Sector?
As per AXA Investment Managers, the combination of increased demand and supply constraints resulted in a favourable backdrop for the broader US renewable energy sector. Furthermore, the lower cost and environmental benefits of renewable energy are some positive factors. Trump’s return to the White House kicked off with several executive orders. Apart from announcing a national energy emergency, he ordered the withdrawal from the Paris Agreement on climate change and rolled back the clean energy initiatives.
Despite such announcements, AXA Investment Managers expects the US clean energy sector to have potential investment opportunities, considering the increasing power demand. The US power demand growth remained weak between 2000 and 2020, averaging 1%. However, it is projected to increase from 2024 onwards. As per the investment management firm, a 2% – 3% increase in the growth rate per annum will be significant, reflecting a doubling or tripling of the historical rate. The overall US power demand can grow at a CAGR of 3.1% between 2020 and 2040, against 0.1% between 2010 and 2020. This higher demand will be supportive of the long-term trend, with potential investment opportunities, from power companies to the ones involved in the energy and equipment supply chain.
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Trump’s Deregulation To Be a Critical Growth Factor
One of the President’s priorities revolves around reducing government bureaucracy and inefficiency. Notably, permitting new energy projects remained slow over the past few years because of understaffed government departments and burdensome environmental criteria, opines AXA Investment Managers. In an executive order on “unleashing American energy”, Donald Trump is focusing on reducing official rules and processes that seem unnecessary, and accelerating energy projects, constraining the remit of the NEPA (National Environmental Policy Act). Interestingly, most of the permit requirements stem from this act.
Overall, economics, growth and a continued climate of innovation and competition hint at the robust US power demand, which can also support the prospects of clean energy and its supply chains.
With this in mind, we will now look at the 12 Most Promising Energy Stocks According to Analysts.
An aerial view of a power plant, symbolizing the company’s investments in energy infrastructure sector.
Our Methodology
To list the 12 Most Promising Energy Stocks According to Analysts, we used a screener to find companies catering to the energy sector. Next, we chose the ones that analysts see the most upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of February 12. We also mentioned the hedge fund sentiment around each stock, as of Q3 2024.
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12 Most Promising Energy Stocks According to Analysts
12) Shell plc (NYSE:SHEL)
Average Upside Potential: 19.8%
Number of Hedge Fund Holders: 48
Shell plc (NYSE:SHEL) operates as an energy and petrochemical company. Despite the reduced earnings in Q4 2024, cash delivery was solid and the company generated FCF of $40 billion across the year, higher than in 2023, in the lower price environment. Shell plc (NYSE:SHEL)’s continued focus on simplification supported delivering more than $3 billion in structural cost reductions since 2022. The company’s focus on disciplined capital allocation drove down 2024 cash capex to $21.1 billion.
Shell plc (NYSE:SHEL) expects its cash capex range for the full year 2025 to be lower than its 2024 range. The company’s renewables and energy solutions consist of activities like renewable power generation, marketing and trading, optimization of power and pipeline gas, carbon credits, and digitally enabled customer solutions. Notably, the global demand for LNG is expected to see a strong rise in the next few years, reported Reuters while quoting the scenarios published by Shell plc (NYSE:SHEL).
The company’s diversified portfolio, including upstream, downstream, and integrated energy solutions, enables it to adjust to shifts in the overall energy demand. The energy sector continues to witness growth in energy storage technologies and digitalization of energy management systems. Shell plc (NYSE:SHEL) has been making investments in smart grids and energy storage solutions which can place it as a leader in the evolving energy ecosystem.
11) Occidental Petroleum Corporation (NYSE:OXY)
Average Upside Potential: 23.3%
Number of Hedge Fund Holders: 71
Occidental Petroleum Corporation (NYSE:OXY) is engaged in acquiring, exploring, and developing oil and gas properties. Berkshire Hathaway remains highly optimistic about the company, with the conglomerate owning more than 28%. Buffett seems to be a believer in the long-term strength of oil and energy. While the global economies continue to pivot towards renewables, Warren Buffett believes that fossil fuels are expected to play a crucial role.
Occidental Petroleum Corporation (NYSE:OXY) continues to be a leader in carbon capture technology, an area that can make the company a key player in the energy transition. What makes this investment even more appealing are the government incentives and tax credits focused on carbon reduction. Elsewhere, JPMorgan upped the company’s stock price to $58 from $56, keeping a “Neutral” rating. In 2025, the firm anticipates that natural gas producers will benefit from 3 powerful secular demand trends.
These trends include building a significant LNG export capacity, higher power demand from electrification, and switching from coal to gas. Occidental Petroleum Corporation (NYSE:OXY)’s acquisition of CrownRock has aided the former in expanding its footprint in the Permian Basin, which is one of the most productive oil and gas regions in the US. The enhanced presence is expected to result in numerous benefits for Occidental Petroleum Corporation (NYSE:OXY)’s future performance.
10) Coterra Energy Inc. (NYSE:CTRA)
Average Upside Potential: 26.1%
Number of Hedge Fund Holders: 39
Coterra Energy Inc. (NYSE:CTRA) is an independent oil and gas company, which is engaged in the development, exploration, and production of oil, natural gas, and natural gas liquids. Roth MKM upped the company’s price target to $33 from $30, keeping a “Buy” rating as part of the broader research note on the energy sector. The firm increased its 2025 WTI oil price forecast by 1% to $71. While it expects marginal risk to the downside for oil prices because of likely supply increases from OPEC, it also sees that such increases might be offset by the loss of barrels in sanctioned countries such as Iran and Russia, maintaining a balance in the oil markets.
Furthermore, robust demand for natural gas from much higher LNG exports, together with gas-fired power generation and robust supply discipline from producers can support natural gas prices moving forward, says Roth MKM. Elsewhere, Raymond James upped Coterra Energy Inc. (NYSE:CTRA)’s price target to $41 from $35, maintaining an “Outperform” rating. The company’s efficiency gains in the Permian region offer a strong opportunity for future growth.
The Permian Basin has rich oil and gas reserves, and enhanced operational efficiency can result in higher production at lower costs. Therefore, a combination of increased output and lower expenses can fuel Coterra Energy Inc. (NYSE:CTRA)’s profit margins and cash flow generation.
9) Canadian Natural Resources Limited (NYSE:CNQ)
Average Upside Potential: 26.8%
Number of Hedge Fund Holders: 48
Canadian Natural Resources Limited (NYSE:CNQ) is a senior crude oil and natural gas production company, having continuing operations in its core areas located in Western Canada, the U.K. portion of the North Sea, and Offshore Africa. The company’s high quality, diversified asset base along with its flexible capital allocation strategy remains a significant competitive advantage. Canadian Natural Resources Limited (NYSE:CNQ)’s disciplined and focused approach allocates capital and focuses on optimizing the product mix based on the highest return projects, enhancing the shareholders’ value.
Its 2025 operating capital budget of ~$6 billion aims to provide value growth and robust returns on capital. Canadian Natural Resources Limited (NYSE:CNQ) targets annual average production in 2025 of between 1,510 MBOE/d and 1,555 MBOE/d, leading to production growth of ~170 MBOE/d or 12% over 2024 levels based on mid-point of corporate guidance. This corporate growth consists of the strategic acquisition of the AOSP and Duvernay assets completed in 2024. Michael Barth, CFA from Raymond James maintained a “Hold” rating on Canadian Natural Resources Limited (NYSE:CNQ)’s stock.
The company’s diversified production mix is balanced and is focused on consisting of ~47% light crude oil, NGLs, and Synthetic Crude Oil, 26% heavy crude oil, and 27% natural gas based on the mid-point of the corporate production guidance range.
8) Schlumberger Limited (NYSE:SLB)
Average Upside Potential: 27.8%
Number of Hedge Fund Holders: 65
Schlumberger Limited (NYSE:SLB) is engaged in the provision of technology for the energy industry. Citi upped the company’s price target to $54 from $50, keeping a “Buy” rating on its shares after it reported strong earnings and an even better 2025 update. The firm believes that Schlumberger Limited (NYSE:SLB) makes the case for flat revenue and EBITDA in 2025, despite a sizable asset sale and numerous market headwinds. Citi raised its EBITDA forecast, including ChampionX, to $9.59 billion in 2025, or $9.79 billion including other income.
In FY 2024, Schlumberger Limited (NYSE:SLB)’s revenue increased by 10% YoY and adjusted EBITDA went up by 12% YoY, while generating $3.99 billion in FCF, allowing it to return $3.27 billion to shareholders and reduce net debt by $571 million. The company opines that long-term fundamentals are expected to support oil and gas investment. While upstream investment growth is expected to remain subdued in the short term as a result of global oversupply, Schlumberger Limited (NYSE:SLB) anticipates that the oil supply imbalance will gradually abate.
Also, global economic growth and a significant focus on energy security, together with higher energy demand from AI and data centers will aid the investment outlook for the oil and gas industry during the rest of the decade. ClearBridge Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Our largest sell was Baker Hughes, which we made to fund our new position in oilfield service provider peer Schlumberger Limited (NYSE:SLB). While we acknowledge that Baker Hughes has stronger near-term tailwinds, its strong performance has resulted in a historically wide valuation gap to Schlumberger. Schlumberger has similar exposure to the oil and gas industry, but also has an improving portfolio of assets and greater digital initiatives that we believe will lead it to outperform Baker Hughes over the long run.”
7) ConocoPhillips (NYSE:COP)
Average Upside Potential: 30.0%
Number of Hedge Fund Holders: 66
ConocoPhillips (NYSE:COP) is a leading energy player as it is one of the largest independent exploration and production companies focusing on crude oil, natural gas, and natural gas liquids. Analyst Suvro Sarkar from DBS reiterated a “Buy” rating on the company’s stock, providing a price objective of $130.00. The rating is backed by several factors highlighting ConocoPhillips (NYSE:COP)’s strong operational performance and strategic growth initiatives.
Furthermore, ConocoPhillips (NYSE:COP) remains focused on expanding its low-cost portfolio by improving its drilling efficiency and acquiring strategic assets. Some of the notable acquisitions consist of Concho Resources and Shell’s Permian assets, cementing its position in the prolific Permian Basin. ConocoPhillips (NYSE:COP) continues to advance its LNG strategy with key projects and agreements globally. Elsewhere, Truist Securities maintained a positive stance, with analyst Neal Dingmann reiterating a “Buy” rating and a target of $139.00.
ConocoPhillips (NYSE:COP) is expected to sustain single-digit production growth and significant reductions in capital expenditures with the help of improved operational efficiencies. The analyst also highlighted that the company is well-placed to refine its portfolio by planning ~$2 billion in asset sales. This move focuses on enhancing the quality of its assets.
6) Halliburton Company (NYSE:HAL)
Average Upside Potential: 30.9%
Number of Hedge Fund Holders: 38
Halliburton Company (NYSE:HAL) offers products and services to the energy industry. Saurabh Pant, an analyst from Bank of America Securities, maintained a “Buy” rating on the company’s stock. The rating is backed by several factors, such as strategic initiatives and market positioning. Even though the company faced challenges in 2025 because of weak US pricing and a cautious global oil market, Halliburton Company (NYSE:HAL)’s prospects seem to be promising with an expected recovery in North American spending in 2026 and beyond.
Halliburton Company (NYSE:HAL)’s robust customer alliances and investments over the past years have placed it well to capture a broader market share without the requirement of new acquisitions. While there are some risks, mainly with anticipated declines in revenues and margins over the near term, Halliburton Company (NYSE:HAL)’s disciplined capital management, together with healthy FCF, aids the analyst’s Buy rating. The anticipation of a bottoming out of the US land downcycle, together with an expected upside in broader gas markets, paints a positive outlook.
Despite the challenging environment, there are certain areas where Halliburton Company (NYSE:HAL) continues to make progress. It has been making investments in advanced drilling technology, artificial lift, and well intervention services, which can support its revenues over the upcoming 3-5 years.
5) Matador Resources Company (NYSE:MTDR)
Average Upside Potential: 31.3%
Number of Hedge Fund Holders: 30
Matador Resources Company (NYSE:MTDR) is an independent energy company, which is engaged in the exploration, development, production, and acquisition of oil and natural gas resources. TD Cowen analyst Gabe Daoud maintains a “Buy” rating on the company’s shares. The efficiency gains, synergy capture, and well-productivity screens can help Matador Resources Company (NYSE:MTDR) in 2025. The company’s strategic focus on developing oil-rich zones and areas having higher working interests possesses the potential to fuel strong improvements in capital efficiency and returns.
Through its focus on high-value targets, Matador Resources Company (NYSE:MTDR) can maximize its revenue per well and enhance overall ROIC. As the company focuses on refining its drilling and completion techniques in such areas, there remains significant potential for cost reductions and productivity improvements. Furthermore, a critical driver of Matador Resources Company (NYSE:MTDR)’s recent success and future growth potential is its strategic acquisition strategy. Its most significant move was the acquisition of Ameredev.
After the acquisition, Matador Resources Company (NYSE:MTDR) will have collectively more than 190,000 net acres in the core of the Delaware Basin, production surpassing 180,000 BOE per day and proved oil and natural gas reserves of more than 600 million BOE. Additionally, the company will have ~2,000 net locations, providing an inventory of 10 – 15 years with wells outpacing a 50% average rate of return.
4) Diamondback Energy, Inc. (NASDAQ:FANG)
Average Upside Potential: 36.6%
Number of Hedge Fund Holders: 49
Diamondback Energy, Inc. (NASDAQ:FANG) is an independent oil and natural gas company, which is engaged in acquiring, developing, exploring, and exploiting unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Mizuho Securities analyst Nitin Kumar CFA maintained a bullish stance on the company’s stock, giving a “Buy” rating. The rating is based on Diamondback Energy, Inc. (NASDAQ:FANG)’s strategic operational plans and robust financial metrics.
The company is anticipated to maintain its production levels while, at the same time, managing costs effectively. Furthermore, Diamondback Energy, Inc. (NASDAQ:FANG)’s equity investments and asset management strategies, mainly through its Viper subsidiary, can bolster financial health and support its deleveraging efforts. The company’s consistent activity in the Permian basin with potential M&As continues to bolster its market position.
While the broader energy sector has been witnessing challenges from commodity price volatility and elevated pressure for environmental sustainability, Diamondback Energy, Inc. (NASDAQ:FANG)’s focus on the Permian Basin, renowned for low-cost production, places it well. Its exploration into gas power generation and water management showcases the forward-thinking approach to diversification and lower costs.
3) Permian Resources Corporation (NYSE:PR)
Average Upside Potential: 37.6%
Number of Hedge Fund Holders: 56
Permian Resources Corporation (NYSE:PR) is an independent oil and natural gas company, which is focused on the development of crude oil and related liquids-rich natural gas reserves. Wells Fargo analyst Hanwen Chang maintained a bullish stance on the company’s stock, providing a “Buy” rating. This rating stems from Permian Resources Corporation (NYSE:PR)’s healthy operational performance and efficiency improvements. It is anticipated to post strong financial results in Q4 2024, with a strong emphasis on improved capital efficiency and potential M&As.
The analyst’s modeling adjustments for Permian Resources Corporation (NYSE:PR) demonstrate increased commodity price realizations and reduced operating expenses, favourably affecting its estimated FCF generation for 2025. The company’s ability to sustain its production levels and reduce capex plays a critical role, together with acquisition opportunities in the broader market. Permian Resources Corporation (NYSE:PR) has entered into a definitive agreement to sell natural gas and oil gathering systems mainly located in Reeves County, Texas to Kinetik Holdings Inc.
The divestiture has been done at a price that is accretive over the short and long term, streamlining its business and driving value. TimesSquare Capital Management, an equity investment management company, released its Q3 investor letter. Here is what the fund said:
“We often see the ebb and flow of the Energy sector tied to underlying commodity prices. In this area, we seek low-cost exploration & production companies with high-yielding acreage or specialized service providers. Permian Resources Corporation (NYSE:PR), an exploration and production company with operations in the Delaware Basin of West Texas, slipped by -15%. While second quarter profits and free cash flow were above sell-side projection, oil production and capital expenditures were only in line. Of note, oil prices fell by roughly -16% during the third quarter. Management continues to drive drilling and completion efficiencies, the bulk of which are associated with faster drilling and completion times.”
2) Cenovus Energy Inc. (NYSE:CVE)
Average Upside Potential: 37.8%
Number of Hedge Fund Holders: 48
Cenovus Energy Inc. (NYSE:CVE) is engaged in developing, producing, refining, transporting, and marketing crude oil, natural gas, and refined petroleum products in Canada and internationally. Analyst Lloyd Byrne from Jefferies maintained a “Buy” rating on the company’s stock. The rating is backed by several strategic developments at Cenovus Energy Inc. (NYSE:CVE). Its production guidance for 2025 aligns with market anticipations, and even though the capex is marginally above predictions, it is anticipated to decline over time. The company released its 2025 corporate guidance, including capital investment of $4.6 billion – $5.0 billion, delivering upstream production of 805,000 barrels of oil equivalent per day (BOE/d) – 845,000 BOE/d and downstream crude unit utilization of 90% to 95%.
Cenovus Energy Inc. (NYSE:CVE) is entering the final year of a 3-year investment cycle, which is expected to fuel planned production growth of 150,000 BOE/d by 2028 end and allow significant expansion of free funds flow. The company plans to focus on controlling costs, improving the profitability of its strategic downstream business, and optimizing the advantaged portfolio to deliver value for shareholders. Cenovus Energy Inc. (NYSE:CVE)’s disciplined capital plan and healthy emphasis on cost control can support continued returns to shareholders of 100% of excess free funds flow over time while, at the same time, maintaining net debt near $4.0 billion.
1) Devon Energy Corporation (NYSE:DVN)
Average Upside Potential: 39.8%
Number of Hedge Fund Holders: 41
Devon Energy Corporation (NYSE:DVN) is an independent energy company, which is engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids. The company’s core multi-basin portfolio is considered one of the most robust among exploration and production (E&P) companies. Notably, this diversified asset base offers operational flexibility and supports mitigating risks related to regional fluctuations in production or market conditions.
By operating in multiple basins, Devon Energy Corporation (NYSE:DVN) can allocate capital to the most compelling opportunities throughout its portfolio, supporting returns and maintaining a balanced production profile. Its presence in key areas including the Delaware basin, Eagle Ford, and Bakken offers access to several resource types and operational environments, allowing Devon Energy Corporation (NYSE:DVN) to leverage its best practices throughout regions and potentially unlock synergies. Also, the acquisition of Grayson Mill Energy adds a high-margin production mix, enhancing its position as one of the leading oil producers in the US.
As a result of the Grayson Mill acquisition and robust YTD (period ended September 30, 2024) performance, Devon Energy Corporation (NYSE:DVN) has revised its production forecast higher in Q4 2024 to a range of 811,000 – 830,000 Boe per day, reflecting a 13% rise as compared to Q3 2024. This volume growth is expected to stem from an estimated 110,000 Boe per day of incremental production from Devon Energy Corporation (NYSE:DVN)’s Williston Basin acquisition.
While we acknowledge the potential of DVN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than DVN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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