Goldman suggests these energy stocks to capitalize on the decline in crude oil.

Goldman Sachs suggests that the decline in crude oil this month has led to a drop in energy stocks, but this presents an opportunity for investors to invest in high-quality companies.

On Tuesday, both U.S. crude oil and the global benchmark Brent reached their lowest levels since December 2021, as bearish sentiment took over markets due to concerns about future demand softening.

Although crude oil futures experienced a slight recovery on Wednesday, the U.S. benchmark and Brent are still declining by approximately 8.5% and 10.4%, respectively, in September.

Goldman analysts, led by Neil Mehta, advised clients on Wednesday to consider adding to Energy stocks with high-quality asset bases, valuation support, and strong balance sheets that can withstand heightened uncertainty/volatility.

Goldman views companies with both exploration, production, refining, and marketing operations as valuable among U.S. majors, especially as they focus on shareholder returns, according to Mehta. Conoco has fallen 9.7% this month and 11.5% for the year.

According to FactSet data, Wall Street analysts have an average stock price target of $139 on Conoco, which implies an upside of nearly 37% from Wednesday's close of $102.57 per share.

Despite the recent departure of CEO Tim Duncan, the investment bank still prefers independent producers with strong earnings execution. Talos has experienced a 5.9% decline this month and a 24% drop this year.

According to FactSet, the average price target for The Street on Talos is $18, which represents approximately 70% upside from Wednesday's close of $10.84 per share.

According to Goldman's forecast for mid-cycle natural gas prices of $3.50 per million BTUs (MMBtu), EQT is projected to have the highest free cash flow yield among natural gas producers in 2026. However, EQT's free cash flow yield has decreased by nearly 2% this month and it has pulled back about 15% this year.

Despite Goldman's concerns about the near-term weakening of natgas, the spot price is approaching its lowest point and increasing power demand and the use of liquefied natural gas will provide support in the future, according to Mehta.

According to FactSet, the average target price of the stock is $43, which represents a 31% return from Wednesday's close of $32.88 per share, based on the Street consensus among analysts.

— CNBC's Michael Bloom contributed to this report.