Energy stocks have already rallied sharply since the Strait of Hormuz closed, but Goldman Sachs says the real opportunity may just be starting, as higher oil forecasts reset valuations and leave select names with meaningful upside from current levels.

On Sunday the bank upgraded its oil price forecasts across the board, now expecting Brent crude to average about $80, $100, $90, and $80 per barrel across 2026 quarters, up from prior estimates of $75, $85, $70, and $70.

For 2027, Goldman raised its normalized Brent assumption from $70 to $75 per barrel.

Which Oil & Gas Stocks Does Goldman Favor?

Four Permian-focused exploration and production companies anchor the Goldman’s buy list. These names offer an average total return of about 22%, according to the report.

Goldman raised its price target to $23 from $22, implying a 15% upside from last Friday’s closing price.

Diamondback Energy Inc. (NASDAQ:FANG), Viper’s parent, carries a raised $216 target and an estimated 12% average FCF yield on 2027/2028 estimates, versus a large-cap peer average of 10%. 

Ovintiv Inc. (NYSE:OVV) rounds out the four E&P buys with a $66 target and a pending $3.0 billion divestiture of Anadarko assets that is expected to further reduce net debt.

On the Majors side, Goldman’s highest-conviction name is ConocoPhillips (NASDAQ:COP), which sits on the bank’s US Conviction List.

Mehta’s team projects a 20%–25% compound annual growth rate in free cash flow per share through 2030, driven by four major projects —NFE, NFS, Port Arthur, and Willow—alongside approximately $1 billion in cost reductions.

Among Canadian Oils, Cenovus Energy Inc. (NYSE:CVE) leads with an estimated 25% total return as the West White Rose project approaches first oil by the end of Q2 2026.

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