8 Best Undervalued Energy Stocks To Buy According to Analysts

3. ConocoPhillips (NYSE:COP)

Average Analyst Estimates as of May 28: $146.71

Average Analyst Upside as of May 28: 26.35%

P/E Ratio: 13.04

Founded in 1917, ConocoPhillips (NYSE:COP) is a Texas-based global energy company involved in the exploration, production, transportation, and marketing of various energy resources, including crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids.

ConocoPhillips (NYSE:COP) has agreed to acquire Marathon Oil in an all-stock deal valued at $17.1 billion, aiming to catch up with rivals as drillers race to secure new oil and gas wells. Under the terms of the agreement, Marathon Oil shareholders will receive 0.255 shares of ConocoPhillips (NYSE:COP) for each share of Marathon Oil, representing a nearly 15% premium based on Marathon Oil’s closing share price. This deal enables ConocoPhillips (NYSE:COP) to expand its presence in key U.S. shale basins, including those in Texas and North Dakota.

Truist Securities raised its price target for ConocoPhillips (NYSE) shares to $165 from $160, while maintaining a Buy rating for the stock, an adjustment that comes in light of the aforementioned acquisition of Marathon Oil. Post-acquisition, ConocoPhillips (NYSE:COP) is projected to perform strongly, potentially generating over $18 billion in free cash flow next year. This would result in a free cash flow yield exceeding 12%, anticipated to be the highest among major oil companies. Overall, COP ranks 3rd among the 9 Best Energy Dividend Stocks to Buy According to Hedge Funds.

As of the end of the first quarter, 62 out of 919 hedge funds tracked by Insider Monkey held stakes in ConocoPhillips (NYSE:COP). The largest stakeholder during this period was Boykin Curry’s Eagle Capital Management, with a $1.8 billion investment. The stock ranks among the top 3 on our list of the best undervalued energy stocks to buy according to analysts.