Fuel for Growth: 3 Big Energy Stocks Get New Price Targets
As oil prices continue to rise, these three stocks show solid upside potential.
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Energy prices continue to rise, and the price of a barrel of crude oil is a weapon of war in the Middle East. West Texas Intermediate Crude recently climbed above $100 per barrel, after a crucial Saudi Arabian pipeline that bypasses the Strait of Hormuz was damaged.
War is unpredictable. While further increases in energy prices would be undesirable for consumers, charts indicate that select energy and energy-related companies are poised to move higher. Some names are already breaking out of bullish setups and reaching new highs.
Let’s go to the charts to see which names in the energy sector are breaking out of bullish patterns and setting up for future rallies.
Sunoco Shines
Imagine an investment that is trading at an all-time high, yet boasts a dividend yield above 5%. I’d call that the best of two worlds, and it describes Dallas, Texas-based master limited partnership Sunoco (SUN).
All charts via Tradingview.
Analysts recently increased full-year earnings estimates for Sunoco by about 12% on average. While income for the oil and gas industry is expected to increase by about 48% next year, Sunoco is looking at growth of closer to 120%, thanks to an aggressive acquisition strategy.
Technically, Sunoco closed at an all-time high on Monday after breaking out of a tight ascending triangle pattern (black lines).
While that pattern provides us with a short-term price objective of $88, there is no overhead resistance to prevent Sunoco shares from moving even higher. This means Sunoco’s new target could be reached quickly.
GRADE:A PRICE TARGET $88
Good COP on the Beat
On Monday, ConocoPhillips (COP) reached its highest price to date. Only a late-day pullback prevented the stock from closing at an all-time high.
The Houston, Texas-based producer of crude oil and natural gas has spent nearly six months forming a saucer pattern (shaded yellow). That bullish formation suggests a share price of $175 for the stock.
GRADE: A- PRICE TARGET $175.
Your EOGs in One Basket
We’ve been holding EOG (EOG) since the early days of the current Middle East conflict. In the months that have passed since then, the stock has made little progress.Â
That could be about to change. Like ConocoPhillips, EOG has formed a bullish cup pattern (shaded yellow). That pattern suggests a target price of $170 for Houston-based EOG.
Why does the market favor ConocoPhillips over EOG? Perhaps it’s due to diversification. EOG is primarily focused on shale resources located within the U.S., while ConocoPhillips boasts a robust and diversified global portfolio.
GRADE: B+ PRICE TARGET $170
Bottom Line
We’re adding Sunoco and ConocoPhillips to our portfolio, while keeping our position in EOG. Take note that as a master limited partnership, Sunoco may receive tax treatment that differs from ConocoPhillips and EOG.
At the time of publication, Ponsi was long SUN, EOG, and COP.
