The report downgraded Exxon Mobiland Chevron to "underweight" from "neutral." An underweight rating means that analysts expect the stock to underform the average total return of the other stocks that the analysts cover during the next six to 12 months.
Despite these stocks' defensive characteristics, analysts said they are now not as well positioned to outperform their group. During the past 12 months, both stocks have outperformed crude oil and the overall market.
"We stress that we would not short these names, but we would lock in recent outperformance, as we believe they have less to offer than the peers in terms of share price performance, underlying growth and valuations appeal in the near term," the report said.
Analysts also downgraded Cenovus Energy and Canadian Natural Resources to "neutral" from "overweight."
"Overall, we have trimmed our price targets by 7 percent on average, reflecting updates in operating guidance, the outlook for near-term capital spending and a change in our long-term currency modeling assumption from C(anadian) $1.05/US$ to parity, which drove much of the average price target revisions of negative 12 percent among our Canadian-denominated names."
JPMorgan's outlook takes into account its analysts' view "that investors will begin to put capital back to work by early 2012 — if not sooner — but will also be more inclined to return to names with a combination of attractive upside, expanding returns, and growing portfolios but with some level of downside protection and attractive dividend yield."
WATCH: Is Now the Time to Buy Oil Stocks?
J. P. Morgan does and seeks to do business with companies covered in its research reports.