Oil prices are soaring amid escalating geopolitical tensions in the Middle East. WTI crude recently settled around $95 a barrel, while Brent crude neared $100. Below, we highlight three undervalued mid-sized energy stocks positioned to capitalize on rising oil..
Amid escalating geopolitical tensions in the Middle East due to the conflict involving Iran, which has led to the near-closure of the Strait of Hormuz and disruptions in regional oil production, crude prices have soared.
(WTI) has recently settled around $95 per barrel, while approaching $100, with intraday highs pushing towards $105.
This rise, driven by supply constraints and fears of broader attacks on energy infrastructure, creates a favorable environment for energy stocks, particularly for undervalued midcaps directly exposed to rising prices. Below, we highlight three standout picks.
1. Talos Energy
Current price: $13.53
Fair value estimate: $18.75 (+38.6% increase)
Market capitalization: $2.29 billion
Talos Energy (NYSE:), an offshore explorer and producer focused on the Gulf of Mexico, directly benefits from rising oil prices thanks to its oil-heavy production mix. Shares are currently at $13.53, reflecting a solid year-to-date gain of about 23%.
InvestingPro’s Fair Value model rates TALO a Buy, with a price target of $18.75, implying an upside of 38.6%.
Recent share buybacks further demonstrate confidence in sustained cash generation as prices rise.
The real takeaway: Talos sports a massive 43.5% EPS growth forecast for 2026 and a strong free cash flow yield of 19.8%, which could make it a dark horse as oil markets tighten.
2. Patterson-UTI Energy
Current price: $9.85
Fair value estimate: $12.06 (+22.5% increase)
Market capitalization: $3.74 billion
Patterson-UTI Energy (NASDAQ:), a provider of drilling and pressure pumping services in key U.S. basins like the Permian, is thriving on increased exploration activity spurred by high oil prices. Shares closed at $9.85 on Thursday, posting an impressive year-to-date return of around 61%.
Source: InvestPro
With a consensus rating of “Buy”, PTEN is trading at a discount to its growth…
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