Energy Stocks Are Surging. Here Are 2 Analyst Favorites

Photograph by Mike Mozart

Among the big oil stocks, Chevron (ticker: CVX) and ConocoPhillips (COP) are among analysts’ favorites, and both stocks are rising so far in 2019, following more bullish commentary from the Street on Monday.

The Back Story. Oil and energy stocks took a beating in 2018, and Chevron wasn’t immune to that tumult, landing near the bottom of the Dow Jones Industrial Average. By contrast, ConocoPhillips was one of the few companies able to sidestep the worst of the sector’s losses, thanks to strict capital discipline and tailwinds from Alaskan operations.

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However, since the new year, the two companies have earned a good deal of analyst praise. UBS upgraded Chevron, citing its robust balance sheet and asset portfolio, while Goldman Sachsargued it would outperform peer Exxon Mobil (XOM); ConocoPhillips, for its part, looks well positioned to ride any gains in crude prices. Both companies also reported upbeat earnings recently: ConocoPhillips delivered better-than-expected earnings, while Chevron also beat analysts’ estimates.

The Plot Twist. Add Wells Fargo to the list of firms that predicts Chevron will be a better bet than Exxon, although both are up about 9.4% so far this year. Analyst Roger Read reiterated an Outperform rating on the former and Market Perform rating on the latter, highlighting Chevron’s more-favorable treatment of shareholders. “Chevron’s decisions to deliver

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