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Investing.com - BofA Securities upgraded National Fuel Gas (NYSE:NFG) from Underperform to Buy and raised its price target to $107.00 from $85.00. The stock, which has surged 48% year-to-date and boasts a market capitalization of $8 billion, is currently trading near its 52-week high of $89.82.According to InvestingPro data, NFG has maintained dividend payments for an impressive 54 consecutive years, demonstrating strong financial stability. InvestingPro analysis suggests the stock is slightly overvalued at current levels.
The upgrade follows BofA’s analysis of improved productivity in NFG’s Eastern Development Area, which the company acquired from Shell in 2020.
BofA Securities noted that recent data shows production tracking at 2.6 bcf per thousand feet, which is 16% ahead of management’s expectations.
The firm believes this improved productivity will enable a more capital-efficient program through the end of the decade, forecasting a 5% production CAGR compared to the 3% consensus estimate.
BofA also projects that drilling and completion capital expenditures will decline by 10%, from $504 million to $422 million by 2027.
In other recent news, National Fuel Gas has seen several noteworthy developments. BofA Securities has upgraded the company’s stock rating from Underperform to Buy, citing improved production efficiency in its Eastern Development Area, which is tracking 16% ahead of expectations. This upgrade comes with a revised price target of $107.00, and BofA now forecasts a 5% production compound annual growth rate (CAGR) for the company. Meanwhile, National Fuel Gas announced a 3.9% increase in its quarterly dividend, bringing it to 53.5 cents per share, marking the 55th consecutive year of dividend increases. Additionally, Raymond (NSE:RYMD) James maintained its Market Perform rating on the stock, with a slight adjustment in its earnings per share estimate to $6.82 due to a weaker gas strip. The company’s fiscal year 2025 production is expected to reach approximately 1.15 billion cubic feet equivalent per day, aligning with its new guidance. In other updates, National Fuel Gas has appointed Donna L. DeCarolis as a consultant after her retirement, with her role focusing on energy policy matters in New York State. Meanwhile, New Found Gold Corp. reported high-grade drilling results from its Queensway Gold Project in Newfoundland and Labrador, with significant gold intercepts indicating potential expansion beyond current boundaries.
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