Will 2018 be the year that the energy sector does its part in participating in this raging bull market? The Dow and S&P 500 have risen exponentially from their 2009 panic selling lows, but some investors are growing concerned that the broader bull market is nearing nine years old. The Dow Jones Industrial Average (DJIA) rose 25% and the S&P 500 rose by almost 19.5% in 2017.

Those gains greatly outpaced expectations that were forecast at the start of 2017, but big oil stocks disappointed.

Chevron Corp. (NYSE: CVX) managed to outperform its 2017 expected return of 5.3% with a total return of 6.4%. Exxon Mobil Corp. (NYSE: XOM) was projected to bring a return of just 0.9% in the past year, but the oil and gas giant posted a return of −7.3%.

Wall Street strategists have weighed in on tax reform, broader earnings growth and higher gross domestic product growth and expect to see the stock market to rise again in 2018. 24/7 Wall St. just came out with its annualized forecasting tool showing that DJIA at 26,400 and at least 2,855 on the S&P 500 are the baseline targets for 2018.

For the Dow to make its target in 2018, it seems that Chevron and Exxon Mobil are going to have to do better ahead for their shareholders. After all, the two energy giants have a combined market cap of over $600 billion but still make up just 5.9% of the Dow when you add both of them together.

At $125.19 a share, Chevron started 2018 with a consensus analyst target price of $128.55. With its 3.45% dividend yield in the mix, investors are expecting total return of 6.13% in 2018. Chevron has a 52-week trading range of $102.55 to $127.74 and a market cap of $241.5 billion. Its weighting in the Dow is 3.54%, but the rank is roughly 15th of the S&P 500.

Exxon’s 2018 starting price of $83.64 a share came with a consensus target price of $86.50. If analysts are correct, its return in 2018 after considering the dividend yield of 3.68% would be about 7.10%. Exxon has a 52-week range of $76.05 to $91.15 and a market cap of $360 billion. Its weighting in the Dow is 2.36%, but the rank is roughly 10th of the S&P 500.

The obvious issue to consider is of course where oil prices are heading. That being said, the current consensus with oil having surged north of $61 per barrel is that oil’s trading range might be tighter than over the past year. However, the floor for oil prices is also expected to be higher than what was seen in the past two years. That is good news for Exxon and Chevron. And what if oil surprises on the upside due to economic strength and higher global demand?

A second issue is that Exxon and Chevron have both been able to accomplish better project spending allocations. And the energy sector as a whole has managed to bring down production costs handily during the boom-bust cycle that the sector endured. This means that both oil and gas giants can reap better profits than in the past, even if they have to endure lower oil prices.

While Chevron started 2018 with a consensus analyst target price of $128.55, some analysts are making much bolder assumptions in 2018. Cowen stunned some investors in December by raising its price target all the way up to $160 from a prior $122.

Exxon’s consensus target price also has risen of late to $86.50. That consensus target was roughly $83 just 90 days ago, and it was under $86.75 at the start of December.

Is it possible that analysts have been so cautious for so long that they might be underestimating the earnings power of Exxon and Chevron? It seems that the strength in the major oil and gas stocks seen in recent days may be Wall Street investors preempting higher analyst targets in 2018.

Exxon is now valued at just under 20 times its consensus earnings estimates for 2018 from Thomson Reuters. Chevron is valued at roughly 23 times expected 2018 earnings. What if those consensus estimates are just too low?

It still feels too early to expect the oil and gas giants to increase their dividends and become big aggressive buyers of their own shares under tax reform. That being said, the lower corporate tax brackets are expected to help the oil giants. And having dividends of about 3.5% to 3.6% still outyield the 30-year Treasury by about 70 basis points, and they still outyield the 10-year Treasury by more than a full 1%. That’s enough to entice many energy investors to stay in the shares, even if they do not expect the major recovery to come later.

Another issue to consider is the Saudi Aramco initial public offering. If that IPO comes in 2018 as the company has pledged, it could suck away some of the new investment dollars that might have otherwise gone into Exxon, Chevron, Occidental, BP, Shell and other major international energy players. Then again, these stocks just haven’t ever taken back off with the broader market.

Exxon was a $100 stock back in the first half of 2014, while Chevron was a $130 stock back then. Perhaps investors are thinking that Exxon’s 2010 acquisition of XTO Energy for some $31 billion may finally bring some upside with rising natural gas prices.

In a bullish and bearish outlook, the one thing that must be considered against oil is the long-term trends surrounding gasoline. The number of electric cars and non-combustible engines are only going to grow. That being said, the targets set by China, Europe and elsewhere may be far too aggressive in a cost-versus-reality scenario. Even with the continued improvements seen in miles per gallon, consumers have discovered in recent years that some car companies flat-out lied about how much better mileage was and how much cleaner the emissions were from major car companies.

Whether oil rises or falls in 2018, it may seem more sensible to expect that 2018 could be a bumpier stock market ride than 2017. And investors might want to consider lower volatility strategies in case a big correction looks more likely. The lower volatility is not characteristic of many small oil and gas stocks, but it might line up just fine for the stocks of America’s two largest energy companies.

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