The oil and gas sector is entering 2026 with clear signals that merger and acquisition activity could accelerate, and Wolfe Research has pointed to two companies it sees as particularly relevant to that dynamic: Coterra Energy (CTRA) and Chord Energy (CHRD). Wolfe has kept Outperform ratings on both names while adjusting price targets to reflect revised commodity-price assumptions and realizations.
Coterra Energy (CTRA)
Wolfe Research reiterated an Outperform rating on CTRA while lowering its price objective to $32 from $35, attributing the revision to an updated commodity price forecast. Over the past year CTRA’s share performance has tracked in line with the Russell 3000 Energy Index. The stock has also been the focus of activist investor Kimmeridge, which in late 2026 criticized the company’s weak relative performance since its 2021 acquisition of Cabot.
Kimmeridge has urged strategic moves that include divesting Marcellus and Anadarko assets to concentrate on Delaware Basin operations, and separating the CEO and chairman roles. Wolfe Research views Kimmeridge’s involvement as a potential source of support for CTRA shares in 2026 and continues to regard the company as undervalued based on its analysis.
For 2026, Coterra has issued preliminary guidance that indicates slightly lower capital expenditure compared with $2.31 billion in 2025, and year-over-year oil production growth of roughly 5%. Wolfe notes that the expected oil growth could come in lower if West Texas Intermediate crude continues trading below $60 per barrel.
In a major corporate development, Coterra agreed to an all-stock merger with Devon Energy, creating a combined enterprise valued at about $58 billion. The transaction has Kimmeridge’s backing and would leave Devon shareholders owning approximately 54% of the combined company. Separately, UBS has reiterated a Buy rating on Coterra and set a $33 price target.
Chord Energy (CHRD)
Wolfe Research also kept an Outperform rating on Chord Energy but reduced the price target to $126 from $140, again reflecting updated price forecasts and expected realizations. Over the past year CHRD has underperformed the Russell 3000 Energy Index by roughly 24%, a shortfall Wolfe links primarily to softer oil prices.
Wolfe’s constructive stance on Chord rests on an expectation for an improving commodity environment in the second half of the year. That outlook is particularly relevant for CHRD because its production mix is about 55% crude oil, which should make the company more sensitive to a recovery in oil prices.
Chord’s preliminary guidance for 2026 includes capital spending of about $1.4 billion and oil production in the range of 157,000 to 161,000 barrels per day. Wolfe suggests Chord could enhance capital efficiency by increasing use of longer laterals, such as 4-mile and 3-mile laterals. The firm also highlights the potential monetization of non-core Marcellus assets in Northeast Pennsylvania, valuing those assets at roughly $600 million under the assumption of a $4 Henry Hub deal price.
On the coverage front, William Blair recently initiated coverage of Chord with an Outperform recommendation. At the same time, UBS reduced its price target on CHRD to $119, citing the drag from weaker oil prices.
Outlook
Wolfe Research’s analysis frames both Coterra and Chord as attractive names to monitor amid potential consolidation in the oil and gas sector during 2026. Activist involvement at Coterra and Chord’s oil-weighted production profile and asset-sale optionality are among the strategic factors Wolfe highlights as capable of influencing shareholder value this year.