State Street SPDR S&P Oil & Gas ETF rated buy with 20% upside amid Iran conflict and rising oil prices

The State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP) is rated a buy due to its diversified exposure to US shale producers expected to benefit from a potential re-rating. Geopolitical tensions, especially the ongoing Iran conflict, are keeping over 10% of global crude supply locked, which supports higher valuations and cash flow for non-conflict zone oil producers. Analysts forecast over 40% EBITDA growth for most XOP holdings by 2026, driven by higher oil prices and mergers and acquisitions activity. Trading at a 4.5x EV/EBITDA multiple for 2026, XOP offers upside potential, particularly among smaller, high-growth companies, though risks like export bans remain relevant.