A second Trump administration will likely impact most, if not all, sectors of the stock market. Few areas are expected to be affected as significantly as the energy sector.
Clean energy stocks that benefited from the Inflation Reduction Act of 2022 experienced declines in the immediate aftermath of the US election. In contrast, many traditional energy companies grew during the same period.
The energy sector is heavily influenced by the political landscape, and some investors are optimistic that easing regulation will benefit fossil fuel companies in particular. Major players such as Exxon Mobil Corp. New York Stock Exchange: gold and ConocoPhillips New York Stock Exchange: KS are well positioned in this space due to their extensive infrastructure and established operations.
If oil and gas stocks do rally in the new year, it could present an opportunity for lesser-known and lesser-known companies. Three such companies to watch include Suncor Energy Inc. New York Stock Exchange:SUCenovus Energy Inc. New York Stock Exchange: CVEand TotalEnergies SE New York Stock Exchange: TTE.
Suncor Energy: Earnings Growth, Debt Control, Dividend Payments
Suncor is relatively unknown in the United States, except to investors who focus on energy stocks. However, it is the second largest energy company in Canada, developing oil basins across the country. With a market capitalization of $51 billion, Suncor is less than half the size of ConocoPhillips and less than 1/10 the size of Exxon Mobil. However, Suncor’s stock is up nearly a quarter over the past year, far outpacing the gains of those two big companies.
Suncor Energy Stock Forecast Today
$56.40
Growth potential 42.86%Moderate purchase
Based on 8 analyst ratings
| High forecast | $68.00 |
|---|---|
| Average forecast | $56.40 |
| Low forecast | $45.00 |
Suncor Energy Stock Forecast Details
The company had a strong third quarter, significantly beating analysts’ estimates with earnings of $1.08 per share and the latest in a series of quarterly surprises. Although earnings were down slightly from last year, Suncor’s announcement that its operational improvement process was successful faster than expected gave the stock a boost. Suncor intends to return all excess cash to shareholders once its debt target is achieved.
Six of eight Suncor analysts have rated the stock a Buy, with a consensus price target of $56.40 nearly 40% above current price levels. If Suncor can continue to operate and remain disciplined in managing its debt, investors could benefit from both share price growth and dividends.
Cenovus Energy: Key operational expansion
Another Canadian company, Cenovus, has a diverse set of oil refining and production operations that have helped it stand out among smaller energy companies. Cenovus is in the final stages of completing a key pipeline between the Christina Lake processing complex in western Canada and the nearby Narrows Lake facility. When the project is completed (likely mid-2025), its production capacity could increase by 30,000 barrels per day.
Cenovus Energy stock forecast for today
US$30.00
Growth potential 90.23%Moderate purchase
Based on ratings from 6 analysts
| High forecast | $34.00 |
|---|---|
| Average forecast | US$30.00 |
| Low forecast | $28.00 |
Cenovus Energy stock forecast details
Cenovus also has a number of new well sites that have either recently come on stream or are expected to come on stream in the coming quarters. Taken together, these new projects should ensure an increase in the company’s production levels. Cenovus has also been successful in containing costs as it expands, which is especially important for a small energy company.
Analysts expect Cenovus shares to nearly double to $30 per share. Despite this, the company’s overall market value will remain a fraction of the largest companies mentioned above, making it a great example of a stealth company to watch in the energy sector.
TotalEnergies: undervalued and possible bargain share price
TotalEnergies stock forecast for today
$78.75
Growth potential 35.80%Moderate purchase
Based on 8 analyst ratings
| High forecast | $87.00 |
|---|---|
| Average forecast | $78.75 |
| Low forecast | $74.00 |
Details of the TotalEnergies stock forecast
TotalEnergies is a French energy company whose activities are wide in scale and geographical coverage. A key benefit of this expansion is the company’s prospects for expansion into both traditional oil exploration and production and areas including renewable energy and liquefied natural gas.
With a forward P/E of 7.7 and a P/S ratio of 0.7, TotalEnergies is likely undervalued in the market. Analysts’ views on the company’s prospects support this assessment, as the company has a price target of nearly $79, implying an upside of 29.4%. TotalEnergies shares are also down more than 8% over the past year, presenting a potential buying opportunity before improvement begins.
Investors should be mindful of oil prices
The main factor in the performance of oil and gas companies is the price of crude oil itself, which usually varies widely. Given Russia’s ongoing invasion of Ukraine, growing instability in the Middle East, and other unknowns regarding the new US administration’s policies, it is especially difficult to gauge how oil prices might change. Investors should beware that falling oil prices could make any of these companies a much less attractive prospect.
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