Top Oil-Weighted Upstream Stocks, According to Seaport By Investing.com

Investing.com -- Seaport analyst Vin Lovaglio has identified his top picks among oil-weighted upstream operators, highlighting two companies that stand out in the sector for their strategic positioning and value potential. The analyst's selections focus on operators with strong asset bases and clear pathways to value creation through operational improvements and strategic acquisitions. Both stocks received Buy ratings and Top Pick designations in Lovaglio's analysis. 1. Devon Energy (NYSE:DVN) – The analyst views Devon Energy as a standout opportunity, particularly following its combination with Coterra Energy's assets. Lovaglio believes the quality and scale of the combined Devon-Coterra Delaware Basin position is unmatched in the sector. The analyst notes that consensus estimates likely do not fully capture the impact of synergy delivery on a portfolio that will probably be streamlined significantly from its current state. Devon trades at approximately a 5% discount on unlevered free cash yield in 2027 compared to peers with similar production scale. Lovaglio points to a clear catalyst trajectory through non-core divestitures that could bridge the valuation gap with competitors. 2. Permian Resources (NYSE:PR) – The company has shown a repeatable competitive advantage through ground game acquisitions and successful integration of assets, according to the analyst. This strategy has driven inventory expansion and improving oil capital efficiency. Lovaglio highlights that Permian Resources has distributed development relatively evenly across its Delaware footprint, which increases confidence in the sustainability of current development returns. The analyst also sees capacity for the company to continue pursuing small-scale, low-cost mergers and acquisitions across the basin. The stock trades in line with the small and mid-cap coverage average, which Lovaglio views as a floor for valuation, suggesting limited downside risk at current levels. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.