Monty Rakusen
U.S. oil and gas major Chevron (NYSE:CVX), pipeline operator Energy Transfer (NYSE:ET), solar technology firm Nextracker (NASDAQ:NXT), and utility Edison International (NYSE:EIX), are among Mizuho Americas’ top energy picks, and preferred ‘Outperform’-rated names, a report on Wednesday showed.
Mizuho has a price target of $205/share for Chevron (CVX), and estimates the oil major’s shares trade at 4.8x 2025e EV/EVITDAX vs. IOC/Offshore peers at ~5.0x, and a 2025e FCF/EV of 9.2%, also a discount to peers at ~6.8%.
Chevron (CVX) is also among Mizuho’s preferred stocks, where the brokerage’s price target is 10% or greater than consensus.
On Energy Transfer (ET), the brokerage has a $20 target price, and believes, the company has no shortage of growth opportunities.
ET’s improved leverage outlook should allow more aggressive capital return beyond the current 3-5% distribution growth rate, Mizuho adds. Finally, it argues that the Street underappreciates Energy Transfer’s (ET) leverage to the data center/AI theme, analyst Gabriel Moreen said.
Next up, Nextracker (NXT) gets a price target of $59, and Mizuho says, the company stands to benefit from demand growth for solar power to support datacenter/AI load growth, with “demand to translate in bookings growth in 2025 and revenue recognition in late 2026 or later at the earliest.”
Last, the brokerage has a price target of $85 on Edison International (EIX), arguing that, the company remains well positioned for 5-7% EPS growth. Mizuho highlights the company’s “strong capital expenditure plan in the coming years and constructive regulatory environment as key drivers” that are likely to aid profit.
“As investors are looking for utilities with robust capital plans and supportive regulation we point to California and believe EIX is the best way to invest,” analyst Anthony Crowdell notes.