The Woodside Petroleum Limited (ASX: WPL) share price is having a mixed year.
Although the energy producer's shares are trading well off their lows, they are also nowhere near their highs for the year.
As a result, the Woodside share price is trading approximately 3% lower year to date.
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Is the underperformance by the Woodside share price a buying opportunity?
If you're looking for exposure to the energy sector, then the weakness in the Woodside share price could be the opening you're hoping for.
According to a recent note out of Morgans, its analysts have put an add rating and $29.95 price target on the company's shares.
Based on the current Woodside share price of $22.28, this suggests there's upside of 34% for investors over the next 12 months.
In addition, the broker has pencilled in a $1.21 per share fully franked dividend in FY 2022. This represents a 5.4% yield at current levels, which brings the total return on offer to almost 40%.
Why does Morgans like Woodside?
Morgans likes Woodside due to its transformational merger with the petroleum assets of BHP Group Ltd (ASX: BHP). Its analysts believe Woodside is getting the better part of the deal.
The broker explained: "We believe WPL has benefited from being in the right place, at the right time. With: 1) BHP/WPL having an existing relationship, 2) BHP eager to boost its ESG profile, and 3) WPL being a quality operator (safe hands which is important for BHP). From an economic standpoint we think WPL is clearly getting the better of the deal, with synergies not baked into deal metrics and BHP willing to accept a discount. The deal is transformative, lifting WPL into being a top 10 global E&P with +2 billion barrels of 2P reserves, with EBITDA of US$4.7bnpa and growth options."
If Morgans is on the money with this one, 2022 could be a bumper year for the Woodside share price.
