Goldman Sachs is bullish on these 3 oil & gas stocks
In a recent research note, Goldman Sachs (NYSE:GS) analysts highlighted three oil and gas stocks that they believe are poised for strong gains, reiterating a Buy rating on each.
The firm's analyst stated that within the sector, they are focused on execution, asset differentiation, and valuation dislocation. Here are three oil and gas stocks Goldman Sachs favors:
Pioneer Natural Resources (NYSE:PXD): The firm acknowledged that PXD shares have outperformed peers following its 2Q results after strong production/cost execution, which «has helped further unlock the value of its differentiated inventory life in the Midland.» PXD, an oil and gas exploration firm headquartered in Irving, Texas, has seen its shares rise more than 14% in the last three months.
«We see room for shares to continue outperforming with confidence in PXD's ability to maintain its recent strong well results combined with further efficiency gains,» the analyst wrote, adding that while the bar for continued outperformance is rising, there is «still room with further upside to capital efficiency.»
Devon Energy (NYSE:DVN): Despite its underperformance post 2Q results, DVN was another stock that Goldman Sachs sees as a Buy. The company is another focused on hydrocarbon exploration. Its shares are down more than 19% in 2023, but the firm «continues to see attractive value for DVN shares.»
This is driven by a combination of its strong production execution, the potential for well costs to reduce a function of lower raw material costs, and its attractive valuation, explained the firm, which added that the company's attractive valuation is underpinned by Goldman Sachs' favorable outlook for resource depth in the Permian.
Diamondback Energy (NASDAQ:FANG): The final
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