Buy the Dip? 3 Oil Stocks Poised for a Big Comeback

Key Points

• Despite an 8.7% drop in 2025, Baker Hughes maintained its full-year guidance, with analysts projecting a potential gain of 31.5% alongside a 2.46% dividend yield.
• Halliburton’s international operations account for 51% of its revenue, bolstered by new contracts with Shell.
• SLB offers the highest potential upside with a projected price target 50% above its current value, despite cyclical sector weakness, and provides a 3.3% dividend yield.

The headlines from President Trump’s Middle East trip trumpeted the deals made by many of the leading technology companies. However, investors should note that the U.S. delegation included three oil services companies' chief executive officers (CEOs). Their stocks have been beaten down this year.

The bearish sentiment has increased this earnings season, driven by pessimistic outlooks based on tariff uncertainty, geopolitical uncertainty, and market volatility.

However, the biggest obstacle is the price of oil. Crude oil prices in the low $60 range disincentivize oil companies to drill, which hurts oil service companies. The recent news that OPEC+ nations will increase output also weighs on crude prices.

That leaves investors with a binary choice. Do they avoid energy stocks and look for growth in other sectors? That's certainly an option. However, contrarian investors may believe that crude oil prices will likely rise as the United States begins transforming to onshore manufacturing capacity in key industries.

However, oil prices don’t need demand growth to rise. An equally valid catalyst could be if oil falls to around $55. That would likely lead major oil companies to curtail production even in areas like the Permian basin, eventually raising the price of oil.

That would mean it’s a good time to look at three oil services companies that act as the picks and shovels for the oil and gas markets.

If the price of oil takes off, these names will be among the first to move higher.

Bullish Analyst Sentiment Is a Key Reason to Buy Baker Hughes

Baker Hughes Co. NASDAQ: BKR stock is down 8.7% in 2025. However, that’s coming off its strong performance in 2023 and 2024, which capped off a five-year run in which BKR stock has delivered a total return of over 200% for investors.

In its most recent quarter, the company delivered record adjusted EBITDA and, despite macroeconomic uncertainty, maintained its full-year guidance with the expectation that it would continue improving its margins through operational efficiency. The company’s forecasts presume that the price of oil will stay at current levels.

That’s likely a prudent move, but analysts believe oil will move higher. The consensus Moderate Buy rating among analysts comes with a price target of $49.11, which would be a gain of 31.5%. 

Some analysts have lowered their price targets after the company’s cautious earnings report. However, even a smaller ceiling on the stock comes with a dividend that the company is committed to growing and currently yields 2.46%.

New Contracts Expand Halliburton’s International Presence

The case for Halliburton Co. NYSE: HAL looks similar to Baker Hughes. The company delivered a solid earnings report, institutions continue to buy the stock, and Halliburton uses operational efficiencies to solidify the fundamentals. On the downside, analysts have lowered their price targets since the company reported earnings.

However, the case for Halliburton may not depend as much on the outlook for the United States. In its most recent quarter, the company generated about 51% of its revenue from international operations. The company also announced three significant new contracts with Shell plc NYSE: SHEL that will add to its growth in the coming quarters.

Another reason investors may want to buy into the weakness in HAL stock is the company’s price-to-earnings (P/E) ratio. Its current and forward P/E ratios are below the sector average and are also a significant discount to its historical levels. Add in a safe 3.32% dividend yield, and investors have valid reasons for riding out the cycle in crude oil prices with a proven winner in the space.

The Size and Scale of SLB May Be Too Compelling to Ignore

With a market cap of over $46 billion as of this writing, SLB NYSE: SLB, formerly known as Schlumberger, is one of the largest companies in this sector. That hasn’t spared it from the sector's overall weakness. SLB stock is down 9%. But in fairness, the stock managed to gain a small amount before the April tariff announcements sent the whole sector lower.

Looking at the company’s P/E ratio, SLB looks fairly valued compared to the sector average, but at a discount to its historical averages.

That’s likely due to the outlook for revenue and earnings. Both are expected to be negative single-digit levels in the next 12 months, far below their historical average.

That's also why analysts are lowering their price targets for SLB stock. However, the consensus price of $52.44 is more than 50% above its closing price on May 20, 2025. That gives it the highest potential upside among the three stocks on this list. Add in the 3.3 % dividend yield, and investors have good reason to buy the cyclical weakness of this sector leader.