3 Energy Stocks Poised to Jump

Analysts at Raymond James give their updated and upgraded outlook on the sector

| More on:
The Motley Fool

Summer is upon us and if the hot days weren’t enough to convince you otherwise, the predictable jump in gas prices should seal the deal. But behind the scenes West Texas Intermediate crude prices continue to average in the triple digits, closing Tuesday at $103.40. While this can be bad news for summer adventurers it’s great news for Canadian energy companies and their investors.

Analysts at Raymond James are now under the impression that WTI crude prices will average out at $102.29 for the year. This is up from earlier predictions of $99.30 for the remainder of the year. They have also released some new price targets for two of the country’s hallmark oil companies, and one that has gone under the radar. A company that has raised its 5.9% yielding dividend by 83% over the last four years.

1. Suncor Energy

Analysts at Raymond James have raised their price targets on Suncor Energy (TSX: SU)(NYSE: SU) to $55.00 up from $51.00, compared to the average price target of $48.20. This leaves plenty of growth space for the stock, which closed at $45.35 on Tuesday. Suncor is also betting on some ‘green’ PR after announcing joint agreements with General Electric to invest up to $18 million to develop new technologies to reduce greenhouse gas emissions and water usage in the oil sands. Investors of Suncor are also currently pocketing $0.92 in annual dividends with a yield of 2%.

2. Imperial Oil

Next up in the parade of price target upgrades is Imperial Oil (TSX: IMO)(NYSE: IMO), which saw its Raymond James price target upped to $61.00 from $53.00. Analysts seem to be mixed with this stock, with lower than expected adjusted earnings in Q1, coming in at $0.09 per share below expectations.

Analysts at BMO Nesbitt Burns have reacted to this quandary by downgrading the stock to ‘underperform’ with a price target of $53.00. The stock closed at $57.37 on Tuesday right after it hit a 52-week high of $57.63. This is quite the turnaround when you consider that on July 8, 2013, the stock was only trading at $41.30. When it comes to the available dividend Imperial Oil offers the smallest of today’s three companies with an annual payout of $0.52 with a yield of 0.9%.

3. Baytex Energy Corp.

Packing the biggest dividend punch is Baytex Energy Corp. (TSX: BTE)(NYSE: BTE), with an annual dividend of $2.88 and a yield of 5.9%. The stock saw its Raymond James price target climb to $58.00 from $51.00, compared to an average price target of $53.30. The stock has dipped a bit since setting a new 52-week high of $49.88 last month closing at $48.17 on Tuesday.

This slight downturn could be cancelled out quickly as the company announced revised production guidance on Monday. The acquisition of Aurora Oil and Gas last month along with its assets in Texas’ Eagle Ford resource play has boosted output projections. Production in Q2 is expected to be 66,000 boe/d as the Eagle Ford output will have a limited effect. For the remainder of the year total production is expected to range between 88,000 to 90,000 boe/d after $440 million in additional capital expenditures and exploration dollars are spent.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own shares in any company mentioned.

More on Investing

four people hold happy emoji masks
Tech Stocks

Here Are My Top 2 TSX Stocks to Buy Right Now

Boasting solid growth prospects, these two TSX stocks are my top picks for investors with a stronger stomach for market…

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Dividend Stocks

Building an RRSP Fortune: 4 Key Insights

The RRSP is not only a tax-saver but a wealth-builder for Canadian income earners.

Read more »

Sliced pumpkin pie
Dividend Stocks

Market Sell-Off: Why These 2 TSX Blue-Chip Stocks Are Too Attractive to Ignore Right Now

Investors worried about the sell-off due to trade tensions might want to secure their investment capital by investing in these…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Transform Your TFSA Into a Tax-Free Monthly Income Machine ($193 a Month!)

These TSX dividend stocks offer high yields and monthly payouts. You can earn over $193 in tax-free income per month.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA: Invest $10,000 in This TSX Stock That Thrives During Market Volatility

This TSX stock isn't your typical investment, but that could be a major benefit for investors.

Read more »

customer uses bank ATM
Bank Stocks

A Forever Dividend Pick: 29.4% Upside in This Canadian Stock

A Canadian Big Bank is a top pick for investors looking for pension-like passive income.

Read more »

senior man smiles next to a light-filled window
Retirement

3 Mistakes That Can Reduce Your Retirement Income

Avoid common retirement mistakes that can impact your finances during market downturns. Learn essential strategies to protect your savings.

Read more »

GettyImages-1394663007
Dividend Stocks

8% Yield: 2 Stocks I’d Buy in April 2025

April had a bearish start because of Trump’s reciprocal tariffs. This dip created an opportunity to lock in an 8%…

Read more »