Goldman Sachs Raises Oil and Gas Stock Price Targets Due to Rising Energy Prices

Investing.com - Goldman Sachs has raised the target prices of several European oil and gas stocks after upgrading their commodity price forecasts. Recently, energy prices surged significantly due to increased geopolitical risks in the Middle East.

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In a new research report, the bank stated that it has updated its sector model to reflect current market conditions, with Brent crude trading near $100 per barrel and European natural gas benchmark TTF at about €50 per megawatt-hour.

Goldman Sachs now forecasts Brent crude prices at $85 per barrel in 2026 and $74 in 2027, up from previous estimates of $76 and $69. Meanwhile, the bank has raised its assumptions for TTF natural gas prices to $15.6 per thousand cubic feet in 2026 and $12.4 in 2027.

As a result, stronger price outlooks have prompted the bank to upgrade its earnings expectations for the sector. Goldman Sachs stated that its estimates for the 2026 and 2027 earnings per share of integrated European oil companies and exploration and production companies have been raised by an average of 17% and 11%, respectively.

“Our EPS estimates for 2026/27 are increased by an average of 17%/11%, making our forecasts for 2026/27 54%/24% higher than the consensus expectations of the LSEG,” said the analyst team led by Michele Della Vigna.

Regarding individual stocks, Goldman Sachs particularly highlighted that BP has significant upside potential, with its 2026 earnings forecast about 82% above consensus, despite only modest gains since the Middle East conflict escalated.

The bank also expects high oil prices to support strong profitability in the sector. Analysts pointed out that if current commodity price levels persist, the profit environment in 2026 could resemble that during the 2022 energy crisis.

Reflecting improved earnings prospects, Goldman Sachs has raised its 12-month target prices for several stocks within its coverage. OMV’s target price was raised from €45 to €48, Equinor from NKr 240 to NKr 260, TotalEnergies from €68 to €75, and Repsol from €22 to €24.

The bank also increased ENI’s target price from €21 to €23, Shell from €42 to €44, and BP from 540 pence to 590 pence. Additionally, target prices for several European exploration and production companies, including Harbour Energy, Aker BP, Var Energi, and Ithaca Energy, were also raised.

Analysts noted that these upward revisions reflect higher profit forecasts driven by stronger commodity prices, although in some cases they adopted slightly lower valuation multiples to account for “rising geopolitical risks and increased volatility in commodities.”

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