Exxon, Chevron or Conoco: who does Wall Street prefer in a volatile oil market?

The price of oil in June is rising and dropping rapidly as the military conflict in the Middle East threatens to disrupt energy supplies and macroeconomic uncertainty prevents markets from gaining stability. Investment analytics platform TipRanks compared the stocks of three major U.S. oil companies - Exxon Mobil, Chevron and ConocoPhillips - to see which one looks better in the eyes of Wall Street amid the turbulence.

Exxon's financial results in the first quarter were better than expected, but still down year-on-year, due to a drop in the cost of oil amid concerns that macroeconomic uncertainty and Donald Trump's duties could undermine global demand. The company partly offset this with higher production in the Permian Basin and Guyana, as well as lower costs. The purchase of Pioneer Natural Resources has strengthened Exxon's position in the Permian Basin. The priority remained returning funds to shareholders - in the form of dividends ($4.3 billion) and buybacks ($4.8 billion). The current dividend yield is 3.5%.

TD Cowen maintains a positive outlook, with analyst Jason Gableman raising his target price to $128 per share, noting the potential for sustained earnings growth of 10% per year through 2030. In his opinion, Exxon is one of the best choices for investors on the back of stable earnings growth supported by unique projects.

Wall Street analysts' consensus forecast for the stock is Moderate Buy with eight «buy» and six «hold» recommendations. The average target price of $123.14 implies a 13.7% upside potential for the stock. Since the beginning of the year, Exxon shares have remained virtually unchanged in price.

Chevron also reported better-than-expected results, but profits fell - both upstream and refining suffered. The company reduced the pace of share repurchases: $2.5-3 billion in the second quarter versus $3.9 billion in the first quarter, but the annual target of $10-20 billion remained unchanged. The stock has a dividend yield of 4.6% with a quarterly payout of $1.71 per share.

Wall Street is awaiting a ruling on the arbitration between Chevron and Exxon over the Hess deal. The issue is whether Exxon can exercise its right of first refusal to buy out Hess' 30 percent stake in one of the world's largest oil and gas projects, Stabroek, which Chevron wants to include in its $53 billion deal.

Barclays looks at the shares neutrally: rating - «hold», target price - $152. Analyst Betty Jiang notes that although the purchase of Hess may generally improve the financial structure of Chevron, it reduces the efficiency of free cash flow generation per share, which may curb the attractiveness of the securities.

The consensus rating is Moderate Buy with 10 «buy», six «hold» and two «sell» recommendations. The average target price is $159.5, with an upside of 11.1%. Chevron shares are also stable since the beginning of the year.

ConocoPhillips is the only one of the three whose shares are down this year (-10%). At the same time, the quarterly reports are better than expected: the company increased production thanks to the acquisition of Marathon Oil, which compensated for falling prices. ConocoPhillips paid $2.5 bln to shareholders in the first quarter ($1.5 bln - through share buyback, $1 bln - in the form of dividends). The dividend yield is 3.3%.

Citi analyst Alastair Syme maintained a «buy» rating, but cut his target price from $140 to $115. He sees strategic sense in the Marathon deal: consolidation in mature shale regions promises savings and efficiency gains. Syme sees the drawdown as a buying opportunity: ConocoPhillips shares are trading at a 15-25% discount to other major players in the sector, while offering comparable growth and sustainability metrics.

On the TipRanks platform, ConocoPhillips has a consensus rating of Strong Buy («strong buy»: 16 «buy» recommendations, two «hold»). The average target price is $113.5, with an upside of about 27%.

Wall Street is most optimistic about ConocoPhillips shares - the company's growth potential is higher than that of its competitors. For Exxon and Chevron securities, the stock market remains more restrained positive mood. ConocoPhillips is able to benefit from a strong balance sheet, a diversified business and the ability to operate effectively in a turbulent oil reality, TipRanks notes.

This article was AI-translated and verified by a human editor