8 Best Undervalued Energy Stocks To Buy According to Analysts

6. Chesapeake Energy Corporation (NASDAQ:CHK)

Average Analyst Estimates as of May 28: $106.75

Average Analyst Upside as of May 28: 17.31%

P/E Ratio: 12.25

Founded in 1989, Chesapeake Energy Corporation (NASDAQ:CHK) focuses on the exploration and responsible development of key assets in three major U.S. oil and gas regions: the Eagle Ford, Haynesville, and Marcellus Shales. The company’s headquarters are located in Oklahoma City, a significant hub for the natural gas and oil industry.

At the beginning of 2024, Chesapeake Energy Corporation (NASDAQ:CHK) announced that it was set to merge with Southwestern Energy in an all-stock deal valued at $7.4 billion, which would position Chesapeake as the largest natural gas producer in the U.S. The merger will add 7.9 billion cubic feet equivalent per day to Chesapeake’s production from Southwestern’s operations in the Appalachian shale formations and the Haynesville basin in Louisiana. However, in April, Chesapeake Energy Corporation (NASDAQ:CHK) announced that the proposed merger had been deferred to the latter half of the year following a second request for additional information from a U.S. regulator. The merger is now under FTC scrutiny, highlighting a broader trend of U.S. lawmakers demanding more rigorous examination of multi-billion-dollar deals in the oil and gas sector.

The string of bad news continued for Chesapeake Energy Corporation (NASDAQ:CHK) as the company missed Wall Street estimates for first-quarter profit in early May. Persistently low natural gas prices significantly impacted the company’s top-line results. Natural gas prices fell by 20.4% in the first quarter compared to the same period last year, with high inventory and weak demand leading producers like Chesapeake to reduce gas production. With that in view, Chesapeake Energy Corporation (NASDAQ:CHK) reported first-quarter EPS of $0.56, falling short of the analyst estimate of $0.60, while revenue for the quarter was $1.08 billion, missing the consensus estimate of $1.28 billion.

As of the end of the first quarter of this year, a survey by Insider Monkey of 919 hedge funds revealed that 52 had invested in Chesapeake Energy Corporation (NASDAQ:CHK). The largest stakeholder among them is Oaktree Capital Management, led by Howard Marks, with holdings valued at $620.39 million.