Goldman Sachs (NYSE:GS) is one of the largest investment banks in the world. When Goldman issues a buy or sell rating on a stock, it can have a huge impact on the stock price. Goldman Sachs is also well-known for having some of the smartest people working for it.
A recent CNBC.com article gives details on the bullish case for oil, and states:
Goldman Sachs says Brent crude oil should rise to about $130 a barrel within a year from $114 today, driven by demand in emerging economies. ... Analysts are bullish on select stocks as industry consolidation is ongoing, and because high growth rates in emerging markets provide a floor for share prices and oil stocks can serve as an inflation hedge. Some companies are paying outsized dividends, which are attractive as Treasury yields.
Here is a closer look at some favorite oil sector stocks from Goldman Sachs:
Exxon Mobil (NYSE:XOM) is a major integrated oil company based in Texas and with operations worldwide, which include refining, exploration, and more. Exxon stock has been declining due to lower oil prices and stock market weakness over debt concerns in Europe. It now trades at a very cheap price-to-earnings ratio of about 8, and pays a solid dividend.
Here are some key points for XOM:
- Current share price: $74.01
- The 52 week range is $60.90 to $88.23
- Earnings estimates for 2011: $8.61 per share
- Earnings estimates for 2012: $8.90 per share
- Annual dividend: about $1.88 per share which yields about 2.5%
Noble Energy (NYSE:NBL) is an oil and gas company based in Texas. Goldman Sachs like the strength of the balance sheet and has set a $121 price target for this stock in the next six months. Noble Energy appears to be the top oil pick from Goldman Sachs.
Here are some key points for NBL:
- Current share price: $81.35
- The 52 week range is $72.74 to $101.24
- Earnings estimates for 2011: $5.02 per share
- Earnings estimates for 2012: $6.97 per share
- Annual dividend: about 88 cents per share which yields about 1.1%
CVR Energy (NYSE:CVI) is a petroleum refining company. This stock looks cheap based on earnings, but the stock is now trading near the 52-week high, so it might make sense to buy on dips. Goldman has set a $32 price target for this stock.
Here are some key points for CVI:
- Current share price: $25.28
- The 52 week range is $6.71 to $27.09
- Earnings estimates for 2011: $4.13 per share
- Earnings estimates for 2012: $4.14 per share
- Annual dividend: none
Hornbeck Offshore Services (NYSE:HOS) provides offshore supply vessels to the oil and gas industry. After the BP (NYSE:BP) oil spill, oil operations in the Gulf of Mexico were greatly reduced, but things are picking up for many companies now. Goldman Sachs has set a $31 price target for this stock.
Here are some key points for HOS:
- Current share price: $28.58
- The 52 week range is $18.06 to $31.77
- Earnings estimates for 2011: a loss of about 60 cents per share
- Earnings estimates for 2012: $1.40 per share
- Annual dividend: none
Data sourced from Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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