While much of the ASX has enjoyed a strong year, ASX energy shares have largely disappointed.
They have been largely impacted by geopolitical turmoil, global economic uncertainty, and weak commodity prices — especially oil.
For context, the S&P/ASX 200 Index (ASX: XJO) is up 7.65% in the past 12 months.
Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) is down approximately 7.34%.
However, with a long-term investing goal, it can be beneficial to look at some of these blue-chip or well-established stocks that might be undervalued.
Here are two worth considering.
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Yancoal Australia Ltd (ASX: YAL)
Yancoal is the third largest ASX energy share by market capitalisation.
It is a coal miner involved in identifying, developing, and operating coal-related projects in Australia. The company has a diversified mix of metallurgical and thermal coal mines. It owns, operates, or participates in 11 coal mines across NSW, Queensland, and Western Australia.
This ASX energy stock has fallen 7% over the last year.
This included a single-day drop of 8% on Yancoal's half-year results released in August.
In its report, Yancoal revealed it actually boosted coal production in H1 2025. However, revenue for the half year fell 15%.
This was caused by a decrease in global coal prices. Essentially, the bottom line has been hurt by low commodity prices, rather than operational shortcomings.
It closed yesterday at $5.38.
It now sits significantly below its 12-month high of $6.79, and price guidance from brokers suggests it could be a buy low candidate.
Bell Potter currently has an overweight recommendation and price target of $6.77.
Paladin Energy Ltd (ASX: PDN)
Paladin Energy is also a major player amongst ASX energy shares. It is the 6th largest by market cap.
The company engages in the development and operation of uranium mines in Namibia and Australia.
It is down 18.33% over the last 12 months but has risen significantly in the last month.
It closed yesterday at $8.69 per share.
Bell Potter believes it can continue to bounce back, with a buy recommendation and a price target of $9.00.
The broker said FY25 (PDN's first full year of production) was marred by operational setbacks (stockpile issues + too little and then too much water).
Despite this, 4Q performance was strong, with management expecting a continuation through 1HFY26 prior to full mining operations commencing in 2HFY26.
We continue to expect near-term volatility within early reporting periods as PDN optimises blending strategies and navigates contract mix/ payment timing at LHM. Predictability should improve as LHM reaches steady state production (FY27).
