Oil prices have been volatile lately due to geopolitical uncertainty in the Middle East. On Monday, crude oil (CM:CL) was up by 1.3% at the time of writing. Amid these developments, oil stocks like Civitas Resources (CIVI), Devon Energy (DVN), and Occidental Petroleum (OXY) have hit 52-week lows, prompting the question: Are these 3 oil stocks a buy at such low levels?
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The volatility in oil prices has been fueled by geopolitical uncertainty after Syrian rebels ousted President al-Assad on Sunday, ending a 50-year family rule in the war-torn region. This has stoked fears of further instability. Furthermore, last week, the Organization of the Petroleum Exporting Countries (OPEC+) delayed planned oil production increases by three months, pushing them to April 2025, and extended the full unwinding of cuts to 2026 due to sluggish demand and rising global supply.
Analysts Remain Bullish About CIVI
Civitas Resources specializes in acquiring, developing, and producing crude oil and natural gas from the DJ Basin in Colorado and the Permian Basin in Texas and New Mexico. The company posted strong Q3 results with an adjusted EBITDA of $910 million, driven by high sales volumes and cost efficiency. The company returned $227 million to shareholders, including $104 million in recent buybacks, and reduced its total debt.
Considering these robust results, analysts remain bullish about CIVI stock overall, with a Strong Buy consensus rating based on eight Buys and one Hold. Over the past year, CIVI has plunged by more than 20%, and the average CIVI price target of $74.13 implies an upside potential of 57.8% from current levels.
Analysts Are Cautiously Optimistic About DVN
Devon Energy is a hydrocarbon exploration company. While the company’s Q3 earnings beat estimates, its recent $5 billion acquisition of Grayson Mill Energy has increased its debt. This has prompted DVN to initiate a $2.5 billion debt reduction plan, with $500 million paid down in Q3 2024.
Analysts remain cautiously optimistic about DVN stock, with a Moderate Buy consensus rating based on 10 Buys and eight Holds. Over the past year, DVN has declined by more than 10%, and the average DVN price target of $50.35 implies an upside potential of 43.9% from current levels.
Analysts Remain Sidelined About OXY
Occidental Petroleum is a hydrocarbon exploration company that reported Q3 earnings that blew past estimates. JP Morgan analyst Arun Jayaram remains sidelined on OXY but raised the price target to $58 from $56. The analyst’s new price target implies an upside potential of 22% from current levels, as Jayaram expects long-term gas prices above $3.50/MMBtu (Million British Thermal Units).
Overall, analysts remain sidelined on OXY stock, with a Hold consensus rating based on six Buys, 14 Holds, and one Sell. Over the past year, OXY has plunged by more than 15%, and the average OXY price target of $61.21 implies an upside potential of 28.8% from current levels.
Key Takeaway
In conclusion, while Civitas Resources, Devon Energy, and Occidental Petroleum have all hit 52-week lows amidst volatile oil prices, each stock offers a different investment outlook. Civitas stands out with strong growth potential, backed by robust financial results and analyst optimism. Devon Energy is working on reducing debt but faces cautious expectations, while Occidental remains more neutral, with analysts offering mixed opinions. Investors should carefully weigh the risks and rewards, as each stock could present opportunities depending on the broader market and geopolitical developments.
