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


CNR Stock: Should You Buy Today?

Canadian National Railway has been hit in recent quarters, as economic growth has slowed, with CNR stock declining 10% in…

Read more »

Family relationship with bond and care
Dividend Stocks

TFSA Investors: 3 Cheap Canadian Stocks for Retirees

These three Canadian stocks are super cheap for retirees looking for a great buy that will last the test of…

Read more »

calculate and analyze stock
Dividend Stocks

CPP Disability Benefits: Here’s How Much You Could Get

Not everybody can get CPP disability benefits. If you want some passive income, consider investing in Royal Bank of Canada…

Read more »

growing plant shoots on stacked coins
Dividend Stocks

Boosting Your Monthly Income: TSX Stocks That Deliver

Dividend investing can boost regular or active incomes, especially select TSX stocks that pay monthly dividends.

Read more »

consider the options
Tech Stocks

Better Buy (2024 Edition): Shopify or Nvidia Stock?

Shopify (TSX:SHOP) isn't the only red-hot tech stock in town that could add to recent gains.

Read more »

Bad apple with good apples

5 Stocks You Can Confidently Invest $500 in Right Now

These stocks could significantly grow your investment over the next decade.

Read more »

Illustration of bull and bear
Tech Stocks

A Bull Market Is Coming: 3 Growth Stocks That Could Thrive

Given their high growth prospects and cheaper valuation, these three growth stocks would be an excellent buy as the market…

Read more »

Golden crown on a red velvet background
Energy Stocks

Enbridge Stock: This Dividend Aristocrat Could Gain in 2024

Enbridge (TSX:ENB) stock is looking like a great buy as management expects it to grow in 2024.

Read more »