If you're wanting exposure to the energy sector, then Woodside Energy Group Ltd (ASX: WDS) shares could be the way to do it.
That's the view of analysts at Goldman Sachs, which are feeling very bullish about the company's outlook.
Buy Woodside shares
According to the note, the broker has retained its buy rating on Woodside's shares with a $38.30 price target.
Based on its current share price of $33.75, this implies a potential upside of 13.5% for investors over the next 12 months.
In addition, the broker is anticipating a 7% dividend yield from its shares over the next 12 months. This boosts the total return to over 20%.
Why is the broker bullish?
Goldman is feeling bullish about Woodside's outlook due to its belief that spot LNG and oil prices will remain elevated for some time to come for a couple of reasons.
In addition, the broker highlights that Woodside's shares are trading at a significant discount to their net asset value. It explains:
Woodside produces over 500 kboe/d LNG, gas and oil across Australia and the Americas, and offers Australia's highest exposure to spot LNG and oil pricing, which we expect will remain elevated due to structural underinvestment despite near-term demand uncertainty, funding attractive growth projects and shareholder returns. We are Buy rated on WDS on (1) Attractive valuation trading at a 17% discount to NAV, (2) Strong returns trading on a 7% NTM dividend yield, (3) Strong near term production growth of 9% over the next year increasing oil exposure where we expect prices to remain elevated.
All in all, its analysts appear to believe this is the ASX energy share to buy today if you're wanting exposure to this side of the market.
