This week, Wall Street took a bullish view on two leading energy stocks: ExxonMobil (XOM 2.87%) and Devon Energy (DVN 3.13%). Here, two Motley Fool contributors take a closer look at Wall Street's opinions and why these energy stocks are a compelling way to energize investors' portfolios right now.

ExxonMobil expects profits to power higher over the next three years

Scott Levine (ExxonMobil): Oil supermajor ExxonMobil has been the subject of two analysts' attention this week. On Monday, Mizuho Financial Group hiked its price target on ExxonMobil stock to $128 from $125 after it updated its multiyear outlook on energy prices. The following day, Morgan Stanley waxed bullish on ExxonMobil stock, resuming coverage on it with an overweight rating and assigning a $145 price target. Based on the stock's closing price of $117.87 on Thursday, Morgan Stanley's estimate implies an upside of 23%.

In addition to lauding the company's scale and its strong presence throughout the energy value chain, Morgan Stanley predicated its price target on the stock's valuation. Currently, shares of ExxonMobil trade at 14.4 times trailing earnings, which represents a discount to the S&P 500's P/E of 27.4.

During the presentation of its first-quarter 2024 financial results, ExxonMobil provided investors with management's profit forecast for the coming years. Should the price of Brent crude oil average $60 per barrel over the next three years, ExxonMobil projects net income will grow at a compound annual growth rate of over 10% from 2023 through 2027. And it's not as if the company believes that it has to achieve some extraordinary expansion in its margins to meet this forecast. Management forecasts meeting this profit target if it generates the same margins that its various businesses averaged from 2010 through 2019. Also, it believes that its ability to fuel growth in its upstream assets located in Guyana, the Permian Basin, and Brazil will significantly contribute to a growing bottom line over the next three years.

Devon Energy is improving the quality of its assets

Lee Samaha (Devon Energy): A couple of weeks after raising its price target on Devon Energy to $57, Mizuho was at it again, raising the target again to $61 while retaining a buy rating on the stock. The latest move comes down to an improved commodity price outlook and a belief that Devon Energy is one of the companies better placed to profit from it.

Mizuho is right to pick Devon Energy as a winner in the sector due to its attractive valuation. The company's investment in drilling in its core Delaware Basin is already bearing fruit in 2024. In addition, the company's capital allocation strategy makes sense in the current environment.

Management finds the stock's valuation so compelling that it's prioritizing share buybacks over increasing its variable dividend in 2024. That might disappoint dividend-focused investors, but if you are bullish on the long-term prospects for oil and Devon Energy's ability to produce more of it, then it makes perfect sense to reduce the share count when the stock is trading on an attractive free cash flow yield. After all, the result will be that ongoing shareholders have a more significant claim to cash flows that will likely increase over time.

As for producing more oil, Devon's focus on drilling in its core assets in the Delaware Basin to improve overall well productivity resulted in the company beating production estimates in its first quarter. Moreover, management upgraded its full-year production forecast to 655,000 barrels of oil equivalent per day (BOE/D) to 675,000 BOE/D from a previous estimate of 650,000 BOE/D. Devon's management believes it's on track to improve well productivity by 10% in 2024.

While Devon's ultimate earnings and cash flow will be led by oil prices, the Wall Street consensus is for the company to generate $3.3 billion in free cash flow (FCF) in 2024. This means it trades less than 10 times the estimated FCF in 2024. It's an attractive stock for investors looking for energy exposure.

Should you buy these stocks now?

With analysts taking an optimistic view of ExxonMobil and Devon Energy this week, it's unsurprising that investors are considering them. Their future prospects are bright.