3 Top-Rated Energy Companies Staging Strong Recoveries

Key Points

• While energy stocks as a group have underperformed this year, a handful of companies have seen sizable rallies on positive news and analyst optimism.
• Three firms to watch include Sable Offshore, California Resources, and BKV.
• All three of these companies have rallied over either the last month or so far year-to-date amid noteworthy business developments.
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Energy stocks, as represented by a benchmark exchange-traded fund (ETF), the Energy Select Sector SPDR Fund NYSEARCA: XLE, have had a difficult first half of 2025. The sector plunged in early April on a combination of tariff uncertainty and broader geopolitical moves in the oil and gas space, and it has failed to fully recover since then. As of late May, XLE is down more than 5% year-to-date (YTD).

Still, demand for oil and gas products continues to rise. Meanwhile, prices have fallen since the start of the year amid a surge in production. Prices of energy companies often move in tandem with the price of oil; however, that's not to say that some individual energy stocks have not thrived during this time period.

Below, we explore three energy firms that have built up some price momentum in recent periods and which may continue to thrive going forward.

Sable Makes Significant Progress Toward Resuming Oil Sales From Santa Ynez Unit

For Sable Offshore Corp. NYSE: SOC, an operator of oil and gas platforms off the California coast, an April sell-off predated a significant rally beginning in mid-May. Shares of SOC are up about 42% in the last month and more than 19% YTD. The company is recommended by six analysts who have assigned a Buy rating, while one additional rating is Sell. Despite its rally, the stock's consensus price target suggests it may still have room for about 10% in upside.

One reason for Sable's momentum is its moves earlier in May to restart oil production at its Santa Ynez Unit at a rate of about 6,000 barrels per day. The company anticipates being able to fill its roughly 540,000 barrels of capacity at the Las Flores Canyon facilities by June, allowing it to relaunch oil sales by July. Prior to Sable's ownership of the Santa Ynez Unit, this pipeline system was responsible for a 2015 oil spill on Refugio Beach in Santa Barbara County, California.

Investor optimism around Sable is strong despite the company's recent earnings report, which included a quarterly net loss of more than $109 million and an announcement of outstanding debt of almost $855 million.

Aera Energy Merger and Other Benefits Propel California Resources Corp.

California Resources Corp. NYSE: CRC engages in both oil and gas exploration and production as well as carbon capture and storage projects. Although shares of CRC are down about 18% YTD, they've risen sharply by about 24% in the last month. 10 out of 13 analysts rate CRC stock a Buy, and the consensus price target suggests almost 42% in upside potential.

California Resources is reaping benefits from its 2024 merger with Aera Energy, which is expected to yield $185 million in collaborative gains through the final three quarters of 2025. The net income for the year's first quarter was more than triple that of the prior year, reflecting the success of CRC's hybrid oil/gas and carbon management operational focus.

This has allowed the company to generate $131 million in free cash flow in the first three months of the year, all while funding $223 million in share and debt repurchases and $35 million in dividend payments.

Carbon Capture Business Draws Unanimous Analyst Enthusiasm for BKV

BKV Corp. NYSE: BKV acquires and develops natural gas and natural gas liquids properties. As one of the largest natural gas producers operating in Texas, BKV has substantial capacity to grow production, including in high-profile industries like data center energy generation. However, its carbon capture branch is one of the company's most influential business lines.

Indeed, earlier in May, BKV struck a deal to secure $500 million in funding for its carbon sequestration projects. The joint venture project with Copenhagen Infrastructure Partners should not only accelerate BKV's carbon capture growth but also provide a fundamental economic boost to this line of its business.

BKV enjoys unanimous Buy ratings from eight analysts and a consensus price target suggesting growth potential of more than 27%. Like CRC above, BKV shares have declined YTD (although by a more modest 7%) but have staged a significant rally in the last month, climbing by nearly 21% during that time.