Oil prices declined in 2024 due to macro challenges in China and an increase in supply from the U.S. and non-OPEC (Organization of the Petroleum Exporting Countries) producers. Prices continue to be under pressure, especially with the escalating U.S.-China trade war and the threat of potential tariffs on Mexico and Canada. However, the new sanctions imposed by the Trump administration on Iran’s crude exports could provide some support to oil prices. Despite an uncertain backdrop, some oil players recently announced resilient quarterly results. We used TipRanks’ Stock Comparison Tool to place Exxon Mobil (XOM), Chevron (CVX), and ConocoPhillips (COP) against each other to find the best oil stock, according to Wall Street analysts.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
Exxon Mobil (NYSE:XOM)
Exxon Mobil delivered better-than-expected earnings for the fourth quarter of 2024, as higher oil and gas production helped offset the impact of lower prices and weakness in refining margins. Notably, the entry of additional suppliers has been weighing on Exxon’s refining margins.
The company became the largest oil producer in the Permian basin in 2024 by completing the acquisition of Pioneer Natural Resources in May. Aside from an enhanced asset base, Exxon is also gaining from its aggressive cost reduction measures. Since 2019, the company has generated cumulative structural cost savings worth $12.1 billion and expects this number to reach $18 billion by the end of 2030.
Also, Exxon continued to boost shareholder returns and paid $36 billion through share repurchases and dividends in 2024. XOM stock offers a dividend yield of 3.4%.
Is XOM a Buy or Sell?
Following the Q4 2024 print, Truist Securities analyst Neal Dingmann reiterated a Hold rating on Exxon Mobil stock with a price target of $119. The analyst noted that the upside in XOM’s Upstream and Specialty Products businesses was offset by pressure in the Energy Products business. Dingmann expects Exxon to continue to set new Permian and Guyana production records and deliver significant upside in the Product Solutions segment, fueled by new businesses like Proxxima Resin Systems and carbon materials.
That said, Dingmann expects Exxon to be hit by persistent weakness in refining margins as he sees increased supply continuing to surpass global demand. On the positive side, the analyst anticipates that shareholder returns will remain strong, similar to last year’s 14% compound annual growth rate (CAGR).
Overall, Wall Street has a Moderate Buy consensus rating on Exxon Mobil stock based on 14 Buys and five Holds. The average XOM stock price target of $133.88 implies about 23% upside potential. Shares have risen about 7% over the past year.
Chevron (NYSE:CVX)
Energy giant Chevron recently reported lower-than-expected Q4 2024 earnings due to weakness in its refining business. In fact, the refining business slipped into a loss for the first time since 2020. Moreover, the company cautioned that it expects margins in the refining business to remain under pressure in 2025.
Meanwhile, Chevron delivered record production in 2024, with worldwide and U.S. net oil-equivalent production rising 7% and 19%, respectively. Looking ahead, CVX expects its global output to grow in the range of 6% to 8% this year and by 3% to 6% in 2026, assuming Brent crude oil prices of around $70 per barrel.
Remarkably, Chevron returned $27.0 billion to shareholders in 2024 via share repurchases of $15.2 billion and dividends of $11.8 billion. Further, the board declared a 5% rise in the quarterly dividend per share to $1.71. CVX stock offers a dividend yield of 4.3%. Currently, Chevron is stuck in an arbitration battle with Exxon Mobil over its $53 billion acquisition of Hess Corporation, which owns a 30% stake in Exxon’s Guyana holdings.
Is CVX Stock a Buy, Sell, or Hold?
In reaction to the Q4 print, Raymond James analyst Justin Jenkins reduced his price target for Chevron stock to $175 from $180 and reiterated a Buy rating. The analyst thinks that while the company’s Q4 earnings were a “bump in the road,” operational execution remains strong. Jenkins added that Chevron offers a positive risk/reward profile, with a solid financial base, high relative shareholder payout, and significant oil exposure. The analyst remains bullish on Chevron stock as he thinks that the company is nearing key inflections and catalysts.
With 14 Buys and two Holds, Chevron stock scores a Strong Buy consensus rating on TipRanks. The average CVX stock price target of $177.27 implies 16.2% upside potential. CVX stock has been flat over the past 52 weeks.
ConocoPhillips (NYSE:COP)
Independent exploration and production company ConocoPhillips delivered upbeat earnings for the fourth quarter of 2024, as higher production helped in offsetting lower prices.
For the full year 2024, COP generated cash from operations of $20.3 billion and paid shareholder returns of $9.1 billion via $5.5 billion in share repurchases and $3.6 billion in dividends. At the current commodity prices, COP announced a capital return target of $10 billion for 2025, including $4 billion in dividends and $6 billion in stock buybacks. COP stock offers a dividend yield of 3.2%.
Additionally, ConocoPhillips completed its merger with Marathon Oil in 2024, driving anticipated synergies and enhanced operational efficiency. Notably, the Marathon acquisition added high-quality, low-cost-of-supply inventory to ConocoPhillips’ portfolio. The company aims to deliver over $1 billion in integration-related run-rate synergies by the end of 2025.
Is COP Stock a Good Buy Now?
Following the Q4 results, Barclays analyst Jeanine Wai lowered the price target for ConocoPhillips stock to $135 from $137 and reiterated a Buy rating. Wai thinks that with major capex expected to come down every year after 2025, COP “offers one of the most visible FCF [free cash flow] growth stories” in his coverage through the end of the decade.
Wai believes that the reducing capital spending should translate into higher absolute and per-share cash return, with COP stock remaining attractively valued compared to peers. He believes that the company’s 2025 outlook reflects a more capital-efficient program than initially perceived.
Wall Street has a Strong Buy consensus rating on ConocoPhillips stock based on 18 Buys versus one Hold recommendation. At $134.11, the average COP stock price target implies 36.4% upside potential from current levels. COP stock has declined more than 12% over the past year.
Conclusion
Wall Street is highly bullish on Chevron and ConocoPhillips and cautiously optimistic about Exxon Mobil stock. Analysts see the pullback in ConocoPhillips stock as a good opportunity to build a position and expect higher upside potential in COP stock than in the other two oil stocks. Wall Street is bullish on ConocoPhillips stock due to its solid track record of operational execution, synergies from the Marathon acquisition, and management’s commitment to attractive capital returns.
