S&P 500   4,136.53 (-0.21%)
DOW   32,806.90 (+0.01%)
QQQ   319.42 (-0.72%)
AAPL   164.60 (-0.45%)
MSFT   279.91 (-1.06%)
META   170.64 (+2.11%)
GOOGL   117.28 (-0.16%)
AMZN   138.75 (-1.46%)
TSLA   872.00 (+0.87%)
NVDA   174.17 (-8.28%)
NIO   20.22 (+0.00%)
BABA   90.56 (-2.16%)
AMD   99.71 (-2.54%)
MU   61.42 (-1.67%)
T   18.08 (-1.47%)
CGC   3.17 (+17.41%)
GE   75.50 (+1.53%)
F   15.82 (+3.40%)
DIS   109.13 (+2.34%)
AMC   24.29 (+9.51%)
PYPL   96.04 (+0.76%)
PFE   49.20 (-0.14%)
NFLX   233.69 (+3.05%)
S&P 500   4,136.53 (-0.21%)
DOW   32,806.90 (+0.01%)
QQQ   319.42 (-0.72%)
AAPL   164.60 (-0.45%)
MSFT   279.91 (-1.06%)
META   170.64 (+2.11%)
GOOGL   117.28 (-0.16%)
AMZN   138.75 (-1.46%)
TSLA   872.00 (+0.87%)
NVDA   174.17 (-8.28%)
NIO   20.22 (+0.00%)
BABA   90.56 (-2.16%)
AMD   99.71 (-2.54%)
MU   61.42 (-1.67%)
T   18.08 (-1.47%)
CGC   3.17 (+17.41%)
GE   75.50 (+1.53%)
F   15.82 (+3.40%)
DIS   109.13 (+2.34%)
AMC   24.29 (+9.51%)
PYPL   96.04 (+0.76%)
PFE   49.20 (-0.14%)
NFLX   233.69 (+3.05%)
S&P 500   4,136.53 (-0.21%)
DOW   32,806.90 (+0.01%)
QQQ   319.42 (-0.72%)
AAPL   164.60 (-0.45%)
MSFT   279.91 (-1.06%)
META   170.64 (+2.11%)
GOOGL   117.28 (-0.16%)
AMZN   138.75 (-1.46%)
TSLA   872.00 (+0.87%)
NVDA   174.17 (-8.28%)
NIO   20.22 (+0.00%)
BABA   90.56 (-2.16%)
AMD   99.71 (-2.54%)
MU   61.42 (-1.67%)
T   18.08 (-1.47%)
CGC   3.17 (+17.41%)
GE   75.50 (+1.53%)
F   15.82 (+3.40%)
DIS   109.13 (+2.34%)
AMC   24.29 (+9.51%)
PYPL   96.04 (+0.76%)
PFE   49.20 (-0.14%)
NFLX   233.69 (+3.05%)
S&P 500   4,136.53 (-0.21%)
DOW   32,806.90 (+0.01%)
QQQ   319.42 (-0.72%)
AAPL   164.60 (-0.45%)
MSFT   279.91 (-1.06%)
META   170.64 (+2.11%)
GOOGL   117.28 (-0.16%)
AMZN   138.75 (-1.46%)
TSLA   872.00 (+0.87%)
NVDA   174.17 (-8.28%)
NIO   20.22 (+0.00%)
BABA   90.56 (-2.16%)
AMD   99.71 (-2.54%)
MU   61.42 (-1.67%)
T   18.08 (-1.47%)
CGC   3.17 (+17.41%)
GE   75.50 (+1.53%)
F   15.82 (+3.40%)
DIS   109.13 (+2.34%)
AMC   24.29 (+9.51%)
PYPL   96.04 (+0.76%)
PFE   49.20 (-0.14%)
NFLX   233.69 (+3.05%)

It’s Not Too Late For These Undervalued Energy Stocks 

It’s Not Too Late For These Undervalued Energy Stocks 

Two Undervalued Energy Stocks With Fresh Upgrades 

The energy market has been in a correction along with the broader market-driven by fears of recession. While the fear of recession is not misplaced, the idea that oil prices are going to fall back anywhere the prepandemic level, or that demand will take a deep dive, is. What this means for investors is that energy stocks, especially the smaller, independent operators like Suncor Energy Inc and refiners like Valero Energy are trading at a deep discount with the expectation of robust revenue, cash flow, free cash flow, and capital returns. 

Suncor Energy, Inc Is A “Most Upgraded Stock” 

The Energy Sector has been the most upgraded sector this year and within that, Suncor Energy (TSE: SU) has been one of the most upgraded stocks and the upgrades are still rolling in. The most recent came in late June from Royal Bank of Canada which upped the stock to Outperform from Sector Perform and the sector, in our opinion, is set to outperform in 2022. In their view, after meeting with the company, the safety and reliability rating was on a predictably good path and warranted the upgrade. The new trajectory has the company on track to regain its ranking as the top oil-sands operator as well, which would be another catalyst for share prices. 

The new rating from RBC has the company’s consensus rating edging higher as well but it is still relatively low at Moderate Buy. The new price target is also putting upward pressure on the Marketbeat.com consensus target of $42 which implies about 25% of upside. RBC’s $53 is the new high price target as well but we think it won’t be the last. This company is slated to report earnings in early August and should be able to slide past the consensus despite the high bar set by the analysts. Regardless, the cash and cash flow are ample enough to support the 4.5% yield and the recent doubling of the buyback. 

It’s Not Too Late For These Undervalued Energy Stocks 


High-Yield Valero Price Target Increased At Barclays 

Valero Energy Corporation (NYSE: VLO) pulled back along with the market and even got a downgrade to Neutral in June but that was an outlier. The remainder of analysts' activity in Valero Energy over the past year, including two very recent actions, are all bullish and have the Marketbeat.com consensus price target moving higher as well. The latest actions are price target increases from Barclays and Wells Fargo which have the consensus estimate at $129.50. The consensus estimate is about 25% above the current price and trending higher but that’s not the salient point. The salient point is that both new price targets are above the consensus and include the new high price target of $166 which adds another 28% to the upside potential. 

In addition to the low 6X earnings the stock trades for, Valero also pays a very healthy 3.70% dividend yield that is backed up by a rock-solid balance sheet. The added opportunity is the chance for a dividend increase. Valero hasn’t issued a dividend increase in several years but has a long history of increases prior to that. Assuming the cash and cash flow are even just as-expected we see a high potential for a dividend increase within the next few quarters. Based on the outlook for demand and refining margins we think the company will easily outperform its earnings estimates. 

It’s Not Too Late For These Undervalued Energy Stocks 

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Suncor Energy (SU)
2.9959 of 5 stars
C$39.17-0.1%3.22%9.13Moderate BuyC$49.85
Valero Energy (VLO)
2.8426 of 5 stars
$106.70+1.6%3.67%6.14Moderate Buy$131.15
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Valero Energy right now?

Before you consider Valero Energy, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Valero Energy wasn't on the list.

While Valero Energy currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:

Most Read This Week

Recent Articles

Search Headlines:

Latest PodcastFind Investing Opportunities For The Rest of 2022

Today, Kate’s guest is Rhys Williams, chief investment officer for the Opportunistic All Cap Equity, a long-short strategy at Spouting Rock Asset Management.

MarketBeat Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Privacy Policy | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer.