Antero Resources stock target cut to $44 at JPMorgan

On Friday, JPMorgan analysts adjusted their outlook on Antero Resources (NYSE:AR) shares, lowering the price target to $44.00 from the previous $48.00. Despite this change, the firm maintained its Overweight rating on the stock. According to InvestingPro data, the company, currently valued at $10.8 billion, is trading slightly above its Fair Value, with analyst targets ranging from $23 to $56 per share. The revision comes after Antero Resources’ first-quarter results, which, although presenting several positives, also showed a slight miss in cash flow and EBITDAX. The company’s shares underperformed compared to its gas peers by approximately 2% on Thursday, contributing to a roughly 7% underperformance over the past month. InvestingPro analysis reveals the stock’s volatile nature, with a beta of 3.09, though it has shown remarkable strength with a 35.7% gain over the past six months. This lag is attributed to concerns over potential pricing risks for C3+ products due to China’s retaliatory tariffs on U.S. LPG imports.

The company has successfully secured firm sales agreements for about 90% of its 2025 LPG export volumes at a premium to Mont Belvieu prices, with no rights for cancellation. Antero Resources exports most of its propane and normal butane during the second and third quarters, while focusing on domestic sales in the first and fourth quarters. The firm sales agreements are a significant development, reinforcing the company’s guidance for 2025, including the anticipation that C3+ NGL prices will average $1.50 to $2.50 per barrel above Mont Belvieu pricing for the current year.

Management underscored the favorable market conditions for NGLs during the first-quarter earnings call, highlighting Antero Resources’ strategic position at Marcus Hook that allows for advantageous LPG sales. The company has limited exposure to the Chinese market, where it sent less than 4% of its total C3+ volumes in 2024 and has had no shipments to China year-to-date. Furthermore, there are no existing contracts for deliveries to China for the remainder of the year.

However, JPMorgan analysts noted that a decline in demand from China could still indirectly affect the global LPG market. Antero Resources is also susceptible to the impact of lower absolute pricing at Mont Belvieu. With revenue of $4.3 billion in the last twelve months and a gross profit margin of 64%, the company maintains a solid financial position despite market challenges. For deeper insights into Antero Resources’ financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which are available for over 1,400 US stocks.

In other recent news, Antero Resources reported its first-quarter 2025 earnings, which fell short of analysts’ expectations. The company announced an earnings per share (EPS) of $0.66, missing the projected $0.77, while revenue reached $1.35 billion, slightly below the anticipated $1.38 billion. Despite the earnings miss, Antero Resources demonstrated strong operational strategies, achieving a daily production rate of 3.4 billion cubic feet equivalent (Bcfe) and generating $337 million in free cash flow. The company also focused on financial health by reducing its debt by over $200 million and repurchasing $92 million in stock. Antero Resources maintained its production guidance and expressed confidence in its strategic direction, with a focus on shareholder value through share buybacks. Additionally, the company remains optimistic about the natural gas market, anticipating potential supply constraints that could drive demand. In terms of market activity, Antero Resources has no current plans for mergers and acquisitions, instead focusing on organic growth.

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