Should you load up on Woodside shares?

Let's see what analysts are saying about the energy giant.

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Woodside Energy Group Ltd (ASX: WDS) shares have been having a tough time this year.

Due largely to falling oil prices, the energy giant's shares are thoroughly underperforming the market.

For example, since the start of 2024, the Woodside share price has lost approximately 13% of its value. As a comparison, the ASX 200 index is up 3% over the same period.

But given that Woodside is widely regarded as one of the highest quality companies in the global energy space, is this underperformance your cue to load up on its shares?

Let's see what analysts are saying about the company and its shares right now.

Should you load up on Woodside shares?

A number of brokers see significant value in the company's shares at the current level.

For example, even Macquarie, which has a neutral rating on its shares, has a price target of $32.00, implying 18% upside for investors over the next 12 months.

Elsewhere, Morgan Stanley recently put an overweight rating and $35.00 price target on Woodside's shares. This suggests that they could rise by almost 30% between now and this time next year.

And over at Morgans, its analysts see even more value on offer. The broker has an add rating and $36.00 price target, which implies potential upside of 33% for investors from current levels.

In addition, Morgans is forecasting a 4.6% dividend yield in FY 2024, boosting the total potential return to almost 38%.

The broker believes that recent share price weakness has created an opportunity for investors to buy a high quality ASX stock at a great price. It said:

WDS's share price has been under pressure in recent months from a combination of oil price volatility and approval issues at Scarborough, its key offshore growth project. With both of those factors now having moderated, with the pullback in oil prices moderating and work at Scarborough back underway, we see now as a good time to add to positions.

Increasing our conviction in our call is the progress WDS is making through the current capex phase, while maintaining a healthy balance sheet and healthy dividend profile. WDS still has to address long-term issues in its fundamentals (such as declining production from key projects NWS/Pluto), but will still generate substantial high-quality earnings for years to come.

All in all, this could make it a great option for investors. Especially those that are wanting exposure to the energy sector.

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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