Bernstein SocGen initiates Expand Energy stock with Outperform

On Thursday, Bernstein SocGen Group initiated coverage on Expand Energy (NASDAQ:EXE) with an Outperform rating and set a price target of $150.00. Currently trading at $114.71 and near its 52-week high of $116.46, the $27.3 billion market cap company has attracted strong analyst interest. The firm’s analysis is grounded in a positive outlook on natural gas, anticipating a rise in the mid-cycle Henry Hub price to $5 per million cubic feet (mcf).

The analyst at Bernstein SocGen highlighted the potential for a U.S. gas supercycle, propelled by a substantial and certain increase in liquefied natural gas (LNG) demand and a growing need for power. This view aligns with the broader analyst consensus, as tracked by InvestingPro, which maintains a bullish stance with price targets ranging from $105 to $170. The Haynesville Shale, where Expand Energy is a significant player, was identified as a crucial natural gas basin. With over 70% of U.S. gas supply either associated with oil prices or limited by pipeline capacity, Haynesville’s position allows it to adjust production according to market needs, effectively becoming a swing basin.

Expand Energy, which produces nearly a quarter of the gas from the Haynesville region, is expected to benefit from the shift towards electrifying the U.S. economy. Bernstein SocGen projects that Expand’s production could reach 7.5 billion cubic feet equivalent per day (bcfe/d) by 2026, thanks to increased capacity in the Haynesville area.

The firm also forecasts that Expand Energy will achieve its synergy guidance, delivering $500 million in annual savings by 2026. These savings are likely to stem from corporate cost reductions and enhanced efficiency in drilling operations. With annual revenues of $6.57 billion and projected sales growth of 115% for FY2025, according to InvestingPro, the company shows strong growth potential. According to Bernstein SocGen, Expand Energy is well-positioned to capitalize on the "value over volume" theme in the Haynesville area and is considered a top investment choice in the future of the gas sector, ranking just behind EQT (ST:EQTAB) due to a slightly lower beta to price of 0.44. For deeper insights into Expand Energy’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

In other recent news, Expand Energy reported its first-quarter 2025 earnings, surpassing earnings per share (EPS) expectations but falling short on revenue forecasts. The company posted an EPS of $2.02, exceeding the forecasted $1.67 by 21%, while revenue came in at $2.2 billion, missing the anticipated $2.49 billion by $290 million. This revenue shortfall raised investor concerns despite the strong EPS performance. Meanwhile, Piper Sandler upgraded Expand Energy’s stock from Neutral to Overweight, increasing the price target to $136 from $103, reflecting a positive outlook based on revised gas price forecasts. The firm’s analysts emphasized Expand Energy’s strategic positioning to benefit from the growing demand for natural gas, particularly with the expansion of liquefied natural gas (LNG) export capabilities. Additionally, Expand Energy has been proactive in increasing its rig count and completing drilled but uncompleted wells, aiming for significant production growth in the coming years. The company’s recent inclusion in the S&P 500 and investment grade ratings further bolster its credibility. Analyst feedback from Piper Sandler suggests confidence in Expand Energy’s growth potential and ability to meet increasing energy demands.

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