If you are looking for exposure to the energy sector, then now could be a great time to go for it.
That's because analysts at Morgans have just upgraded two ASX 200 energy shares to a buy rating.
Let's see which shares are being recommended by the broker:
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Karoon Energy Ltd (ASX: KAR)
This energy producer has received a thumbs up from Morgans following the release of its quarterly update.
The broker thinks that management is doing a good job over at Bauna and highlights its strengthening balance sheet. It said:
Temporary Bauna outages weigh on 3Q volumes, but pricing and cashflow hold firm. FY25 guidance narrowed and capex trimmed, signalling tighter operational/capital discipline. Management has done a good job operating Bauna, but some risks cannot be mitigated in an ageing field. Balance sheet strength improving fast with net debt down US$89m QoQ. Medium-term focus shifting to Bauna well recovery and Who Dat East FID. Fundamental positives and share price skew positively, upgrade to BUY (from HOLD) with an A$1.80 target price (was A$1.90).
As mentioned above, Morgans has put a buy rating on its shares with a price target of $1.90. This implies potential upside of 17% over the next 12 months.
Woodside Energy Group Ltd (ASX: WDS)
Another ASX 200 energy share that has received an upgrade from Morgans is industry giant Woodside.
It was pleased with its strong quarterly update and news that US midstream player Williams has entered into the Louisiana joint venture (JV).
Combined with good macro news, the broker isn't surprised to see that Woodside shares are in favour with investors once again. It explains:
On the heels of a strong 3Q25 operational and sales result, Woodside has announced the entry of US midstream player Williams into the Louisiana JV. Given the magnitude of execution risk Woodside faces at Louisiana, we appreciate the strategy to de-risk infrastructure and feedgas delivery. To form a view on the value of the Williams deal we need to gain a better grasp of the pipeline agreement, with the two deals obviously indirectly linked.
Doing good things, and apparently a good week to have good news macro wise, it is little surprise Woodside shares are gaining support. We upgrade our rating to BUY (from ACCUMULATE) post the recent selloff with a A$30.50 target price.
Morgans has a buy rating and $30.50 price target on its shares. This suggests that upside of 25% is possible for investors over the next 12 months. In addition, it is forecasting a 6.3% dividend yield in F 2026.
