Mizuho optimistic about 2026 recovery: Top oil and gas stocks worth buying

Investing.com — Despite recent concerns over oil supply oversupply and high natural gas inventories, Mizuho has identified its top stocks in the oil and gas sector, expecting the market to recover in the second half of 2026.

The company expects the oil market to bottom out in early 2026, with limited non-OPEC supply growth and OPEC+ production restrictions driving a mid-cycle price recovery in the second half.

In natural gas, demand growth from liquefied natural gas, power generation, and infrastructure expansion is expected to outpace supply, creating a structurally undersupplied market despite high production levels.

Refining fundamentals look less attractive after early 2026, as new capacity additions will normalize crack spreads.

Mizuho favors exploration and production companies with strong inventories and flexible balance sheets, while maintaining selectivity on natural gas exposure.

ConocoPhillips

Among its top picks, Mizuho highlights ConocoPhillips as a key target as the energy market prepares for recovery.

Recently, ConocoPhillips was added to Goldman Sachs’ confidence list and downgraded to a neutral rating by Roth/MKM. Reports indicate the company is exploring the sale of approximately $2 billion worth of Permian Basin assets.

Coterra Energy

Another top pick, Coterra Energy stands out in the current market environment and is one of Mizuho’s preferred stocks.

Coterra reported Q4 revenue of $1.96 billion, exceeding expectations, but adjusted EPS fell short. The company also received an upward target price from Raymond James and a downgrade to hold from Texas Capital Securities.

Permian Resources

This Permian Basin-focused operator is also among Mizuho’s selected stocks.

Permian Resources posted Q4 EPS of $0.37, beating analyst estimates, but revenue of $1.17 billion was below expectations.

Chevron

This integrated energy giant is also on Mizuho’s list of favored oil and gas stocks.

Chevron was upgraded to buy by Melius, and the company announced entry into the Libyan market after securing exploration blocks in the Surt Basin.

Chord Energy

Chord Energy is another of Mizuho’s preferred stocks.

The company reported Q4 revenue of $1.17 billion, above analyst expectations, but EPS of $1.28 fell short.

Diamondback Energy

Diamondback Energy is also among the company’s top picks.

Q4 results showed EPS and revenue below analyst estimates. After the report, Benchmark reaffirmed its buy rating on the company.

Range Resources

Range Resources is one of Mizuho’s preferred natural gas exposure stocks.

The company’s Q4 results exceeded analyst expectations in both earnings and revenue, and it announced an 11% increase in quarterly dividends.

Excelerate Energy

Excelerate Energy is also among Mizuho’s preferred natural gas stocks.

The company announced the departure of its CEO, with the chairman appointed as interim CEO. It also plans to relocate its headquarters to Houston by mid-2026.

BKV

BKV is the last of Mizuho’s preferred natural gas exposure stocks.

HF Sinclair

HF Sinclair is one of the refining stocks favored by the firm.

The company’s Q4 earnings and revenue surpassed market expectations. Additionally, Truist Securities raised its target price for the stock.

Delek US Holdings

Another favored refining stock, Delek US Holdings completes Mizuho’s list of top picks.

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