Story
Cheniere, Devon, and NRG Named Top Energy Picks by Raymond James Analysts
Summary
Financial services firm Raymond James has identified Cheniere Energy, Devon Energy, and NRG Energy as its top analyst picks in the energy and utilities sector, citing attractive valuations and strong growth catalysts.
Raymond James has named Cheniere Energy (LNG), Devon Energy (DVN), and NRG Energy (NRG) as its top picks in the energy and utilities space, according to the firm's latest "Analyst Current Favorites" report. The selections highlight companies that analysts believe offer compelling valuations, strong operational performance, and clear growth catalysts.
The list comprises stocks with "Strong Buy" or "Outperform" ratings, with each analyst selecting a single favorite from their coverage universe. According to Raymond James, the rankings are driven by a bottom-up analysis of company fundamentals rather than a broader market-wide recommendation.
Company-Specific Catalysts
Analysts at the firm provided detailed rationales for each selection, focusing on valuation, strategic positioning, and shareholder returns.
Cheniere Energy (LNG)
Cheniere Energy was highlighted for what the analyst described as an attractive valuation, noting its first-mover advantage in U.S. liquefied natural gas (LNG) exports. The firm pointed to Cheniere's highly contracted cash flow profile and a valuation that trades at a discount to its large-cap C-corporation peers. The positive outlook is supported by Cheniere's recent second-quarter 2026 results, which surpassed analyst expectations and led the company to raise its full-year guidance.
Devon Energy (DVN)
AdDevon Energy's inclusion is based on strong near-term oil fundamentals and a significant valuation gap compared to its peers following its merger with CTRA. Raymond James highlighted several key financial metrics:
- 2027E FCF/EV Yield: Approximately 13%, versus a peer average of 8%.
- EBITDA Multiple: Trading at about 4.4x, compared to approximately 5.5x for peers.
- Shareholder Returns: A plan for over $5 billion in buybacks and a recent 33% dividend increase.
The analyst expects the company to exceed its $1 billion merger synergy target, providing further potential upside.
NRG Energy (NRG)
NRG Energy was selected for its combination of a large U.S. retail electricity business and a competitive power generation fleet. Raymond James noted that the recent acquisition of LS Power is expected to accelerate NRG’s long-term adjusted earnings per share compound annual growth rate (CAGR) from 10% to approximately 14%. The company is also returning capital to shareholders, having completed over $1 billion in share repurchases year-to-date in 2025 under a new $3 billion authorization through 2028.
Read next
More on Stocks
West Faces Soaring Prices, Supply Gaps for Critical Metals Three Years After Chinese Curbs
Three years after Beijing restricted exports of gallium and germanium, Western nations face prices up to ten times 2023 levels and a significant supply deficit, despite efforts to launch new production.
Goldman Sachs Downplays S&P 500 'Earnings Bubble' Fears, Forecasts Slower Growth
Goldman Sachs analysts argue that while some U.S. corporate profits are elevated, the S&P 500 is not in an "earnings bubble" and is poised for continued, albeit slower, growth driven by profits rather than valuation expansion.
TSX Futures Edge Higher as Falling Oil Prices Temper Inflation Concerns
Futures for Canada's main stock index saw a slight increase, supported by a third consecutive day of declines in crude oil prices, which has eased investor concerns about persistent inflation.
Morgan Stanley Downgrades Orange on Slower Growth, Rising Leverage Concerns
Morgan Stanley has downgraded French telecom operator Orange SA to "underweight," citing a projected slowdown in profit growth, increased balance sheet leverage, and intensifying competition in Spain.