Oil drilling rigs in a calm ocean channel, Cromarty Firth, Scotland, U.K.
Abstract Aerial Art | DigitalVision | Getty Images
Analysts at Goldman Sachs have named oil stocks it says are set to rally by as much as 54% this year, as the transport market recovers and they start to generate cash returns for investors.
The investment bank expects a “strong” recovery for the sector in the second half of 2021, after oil and gas plunged in 2020 due to a dramatic fall in demand during the coronavirus pandemic.
“As we look farther into 2021, we believe that the combination of oil price recovery, improving downstream margins and cost-cutting will trigger the beginning of a positive earnings revision cycle for the European integrated majors,” Goldman’s analysts led by Michele Della Vigna wrote in a note published this week.
And while European Big Oil has risen around 40% since October lows, Goldman said it sees about another 20% to 50% upside for its “buy” rated stocks: