A mix of factors has lifted oil prices after they hit a 12-month low in December. Heightened geopolitical tensions in the Middle East – particularly concerns about supply risks linked to Iran – have supported crude benchmarks, as well as ongoing uncertainty around production from sanctioned exporters such as Venezuela. Broader shifts in market sentiment tied to U.S. policy rhetoric and risk appetite have also contributed to volatility in energy markets.
Any sustained rise in oil prices would ripple through the broader economy. However, senior energy analysts at Goldman Sachs argue that volatility can also create opportunity. In a recent note, the team highlighted three energy stocks they believe are well positioned in the current environment.
Goldman’s selections span multiple segments of the energy complex, including exploration and production, midstream infrastructure, and utilities, reinforcing the case for diversification.
Each stock also carries a Strong Buy consensus rating on Wall Street, according to TipRanks data. With that context in mind, let’s take a closer look at what sets these names apart.
Viper Energy (VNOM)
Goldman’s exploration and production (E&P) pick is Viper energy, a limited partnership firm that owns and exploits oil and natural gas assets in North America. The company acquires assets in the form of mineral rights and royalty interests, located in high-margin hydrocarbon areas that are mainly undeveloped. Viper’s business model is designed to sustain free cash flow without requiring high demands on capital.
Viper is a subsidiary of the Texas-based E&P firm Diamondback Energy, and uses that relationship to inform its purchases of assets, particularly royalty interests. Diamondback, in turn, is the primary operator on Viper’s assets, and has a clear incentive to develop those acres for improved consolidated returns. The mutual relationship benefits both companies – and Viper’s shareholders.
The shareholders gain because they are the ‘primary business’ for Viper. The company has prioritized providing attractive shareholder returns as a business goal, which it does by loading up on mineral and royalty assets in the Permian basin, one of Texas’ richest hydrocarbon-bearing formations.
Investors should be aware of a couple of important developments with Viper in recent months. In August of last year, the company acquired Sitio Royalties in an all-equity transaction that brought Sitio’s assets under Viper’s rubric. The new assets were integrated into Viper’s operations during 3Q25.
This was followed in November by the announcement that Viper had entered into an agreement to sell off its non-Permian assets to an affiliate of GRP Energy Capital and Warwick Capital Partners. This transaction was valued at $670 million, and is expected to close during 1Q26.
Viper pays out a 33-cent regular dividend to shareholders, with the last payment sent out on November 20. It was accompanied by a 25-cent variable dividend – Viper has a history in recent years of adding variable dividends to the regular payment. The regular dividend annualizes to $1.32 per common share and gives a 3% forward yield, while the addition of the variable increased the yield to 5.2%.
In 3Q25, the last period reported, Viper realized an adjusted net income of $0.40 per share, beating the forecast by a penny. The company finished Q3 with $53 million in cash and liquid assets on hand.
For Goldman’s Neil Mehta, an expert on the energy industry, Viper presents a combination of sound valuation and a positive outlook going forward. He writes of the company, “We see VNOM as a stock with positive valuation support given shares trade at a 10% FCF yield on our 2027 estimates (using $70/bbl Brent oil) – a modest premium relative to oily E&P peer average of 11%. We continue to highlight the benefits of VNOM’s no-capex royalty business model which supports VNOM’s meaningful return of capital commitments (at least 75% of cash available for distribution to shareholders) and low dividend breakeven of ~$30/bbl WTI. While the announced non-Permian assets sales are still pending close, we remain constructive on the long-term benefits stemming from the close relationship between VNOM and FANG as well as the shareholder return profile of the pro-forma, pure-play Permian business in an uncertain oil environment.”
Mehta, a 5-star analyst, puts a Buy rating on VNOM along with a $54 price target that points toward a one-year upside potential of 22%. (To watch Mehta’s track record, click here)
The Strong Buy consensus rating on VNOM shares is unanimous, based on 11 recent positive analyst reviews. The stock is trading for $44.25 and its $50.8 average target price implies a gain of 15% in the coming year. (See VNOM stock forecast)
Cheniere Energy (LNG)
Next on our list is a midstream company, Cheniere Energy. Midstreamers move energy assets from one point to another in the global energy sector; in the case of Cheniere, that means converting natural gas into LNG, or liquefied natural gas, for the export market. Natural gas is in high demand – it is an abundant, relatively clean-burning fossil fuel, and the technology to handle, transport, and use it safely is already established. Cheniere’s business is buying natural gas from North America’s robust gas production sector, converting it to LNG, and selling it on the global market.
To handle this, Cheniere holds a range of gas transport and liquefaction assets. Among these, the Sabine Pass and Corpus Christi facilities are key nodes; both are LNG liquefaction facilities and export terminals. The Sabine Pass facility started export operations in 2016, and has six operational ‘trains,’ or liquefaction units. The Corpus Christi facility, also with six trains, has been in operation since 2018. Together, these facilities can process billions of cubic feet of natural gas into LNG every day, and store it for loading onto specially insulated ships.
In addition to the liquefaction facilities, Cheniere owns transport rights on major natural gas pipelines, using them to gather gas to its facilities for processing. The company also directly owns two pipelines, totaling 115.5 miles and capable of moving 4.25 billion cubic feet per day of natural gas.
Under its current business model, 95% of Cheniere’s LNG production capacity is contracted through long-term agreements, while the remainder can be made available for direct sale to the open market. This model gives Cheniere the advantage of steady, reliable business, while not denying it the ability to take advantage of spikes in price or demand.
In its 3Q25 release, Cheniere reported revenue of $4.4 billion, a figure that was up 18% year-over-year – although it missed expectations by $43 million. The company’s bottom line, reported as a GAAP EPS of $4.75, beat the forecast by $1.86 per share.
This natural gas midstream company caught the attention of Goldman’s John Mackay, who notes the sound business model and the company’s strong industry position. As Mackay explains, “Within midstream, we are constructive on Cheniere Energy, as we continue to see the company’s highly contracted asset base as underappreciated by the market… Cheniere’s 95%+ contracted capacity offers significant insulation from downside to commodity prices relative to peers, LNG’s solid balance sheet position and capital allocation strategy positions the company well for significant buybacks (~$1b of buybacks were executed in 3Q25), and incremental growth catalysts are still possible. Altogether, while recent performance has improved modestly vs December 2025 lows, we see the stock trading at ~10x contracted EBITDA (with no value assigned to commodity upside) as undervalued vs gassy midstream peers trading 11-14x, and we continue to see the stock well positioned for a rebound.”
These comments support the analyst’s Buy rating, while his $275 price target implies that LNG will appreciate by 24.5% on the one-year horizon. (To watch Mackay’s track record, click here)
Cheniere’s Strong Buy consensus rating, like Viper’s above, is unanimous; the gas midstreamer has 9 positive reviews on record. The shares are priced at $220.79, and their $263.25 average price target indicates room for a 19% upside by this time next year. (See LNG stock forecast)
PG&E (PCG)
Last on our list here is Goldman’s utility pick, Pacific Gas & Electric. PG&E, which is based in Oakland, California, is an investor-owned utility – a private enterprise under public ownership that acts as a public utility. PG&E provides both natural gas and electricity to customers in the northern parts of California; PG&E Corporation, the publicly traded entity, acts as the parent company of the utility, PG&E, which in turn serves some 16 million California residents across a 70,000-square-mile swath of the state.
Electric rates and consumer bills are rising in California, which has prompted governmental and regulatory interventions. In one of the latest such moves, state regulatory authorities lowered the profits (return on equity) that public utilities are permitted to realize on infrastructure investments. PG&E had its ROE lowered to 9.98%, putting the company in the middle of the pack compared to peer utility firms in the state.
In another development that investors should be aware of, PG&E last month settled a shareholder action related to the wildfires that swept the state in 2017 and 2018. The agreement, a $100 million settlement filed in the US District Court in San Jose, specifically does not constitute an admission of wrongdoing. The North Bay fires of 2017 and the Camp Fire of 2018 killed 107 people and destroyed over 24,000 structures. The settlement, according to the company, is a ‘significant step forward in resolving claims’ and is accompanied by PG&E’s continued work to ‘reduce wildfire risk’ in the state’s energy system.
On the financial side, in 4Q25, PG&E saw revenues of $6.8 billion, up by 2.6% year-over-year – but that figure missed the forecast by $248.5 million. The company’s adj. EPS of $0.36 met Street expectations.
This utility company is part of Carly Davenport’s coverage universe at Goldman. Davenport lays out a convincing case for investor interest here, saying of the stock, “We believe substantial valuation upside remains at PCG in our Utilities coverage, despite its recent rally… PCG continues to trade at 42% discount to our coverage on a 2027 P/E basis, reflecting investor concerns that we believe should be increasingly mitigated in the near term. The focus is now shifted to Phase 2 wildfire legislation, with critical clarity expected around April 2026 when the CEA files its final recommendations, potentially paving the way for further legislative action and subsequent credit rating upgrades, all of which should narrow the valuation gap. Furthermore, PCG’s robust $73 billion capital plan, with 27% allocated to higher-return transmission investments, support an above average growth trajectory.”
Davenport also notes that the company’s ability to return capital to shareholders is another significant advantage: “Management’s willingness to consider buybacks and dividend growth if the valuation discount persists, alongside the company’s strong execution, above-average EPS growth, and ongoing cost efficiency initiatives, reinforces our conviction in PCG’s potential for a significant re-rating.”
Based on this stance, Davenport rates PG&E as a Buy, a rating that she complements with a $22 price target that suggests a potential one-year upside of 21%. (To watch Davenport’s track record, click here)
This power company’s Strong Buy consensus rating is based on 8 analyst reviews that include 7 Buy against a single Hold. The shares are priced at $18.16, and the average target price of $21.5 implies that PG&E has an 18% upside in the offing for the year ahead. (See PCG stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.