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Wednesday, CFRA analyst Stewart Glickman increased the price target on Hess Corporation (NYSE:HES) shares to $154 from the previous target of $145, while keeping a Hold rating on the stock. With a current market capitalization of $44.5 billion and trading at a P/E ratio of 16.8x, InvestingPro data suggests the stock is currently fairly valued. Glickman’s revised 12-month target reflects a valuation of 6.3 times the enterprise value to the projected 2026 EBITDA, which is below Hess’s recent average. The adjustment accounts for the ongoing uncertainty surrounding Chevron ’s (NYSE:CVX) acquisition of Hess.
Glickman explained that the new target, up by $9, is justified by a discount to the company’s historical forward averages due to the acquisition ambiguity. The 2025 earnings per share (EPS) estimate was reduced by $1.33 to $7.36, and the initial 2026 EPS estimate was set at $11.95. Hess’s fourth-quarter operating EPS of $1.76 exceeded the consensus estimate by $0.29. Despite a nearly 6% year-over-year decrease in the average realized pricing per barrel of oil, Hess’s earnings improved, driven by a significant increase in production volumes and strong revenue growth of 21.35% over the last twelve months. InvestingPro analysis reveals the company maintains a strong financial health score, with particularly robust profitability metrics.
The company reported a fourth-quarter production volume of 495,000 barrels of oil equivalent per day (boe/d), marking a 7.4% increase from the previous quarter. However, Hess has forecasted that its first-quarter volumes will range between 465,000 boe/d and 475,000 boe/d, partly due to planned maintenance activities.
Glickman also highlighted the legal dispute between Chevron and Exxon Mobil (NYSE:XOM) over the Guyana assets as a continuing concern for Hess’s stock performance. The arbitration related to this conflict is set to commence in May. This ongoing situation is seen as a significant factor influencing the future of Hess shares.
In other recent news, Hess Corporation reported its Q4 2024 earnings, revealing that it surpassed analyst estimates. The oil and gas producer posted adjusted earnings of $1.76 per share, outperforming the analyst consensus of $1.65 per share. The company’s revenue also exceeded expectations, coming in at $3.23 billion compared to the anticipated $2.96 billion.
Hess reported an 18% increase in net production, rising to 495,000 barrels of oil equivalent per day (boepd) in Q4, up from 418,000 boepd in the same period last year. This increase was primarily driven by higher output in Guyana and the Bakken. However, the company guided for Q1 2025 production of 465,000-475,000 boepd, reflecting planned maintenance in Guyana and winter weather impacts in the Bakken.
In terms of cash flow, Hess’s operating activities generated $1.31 billion in Q4, compared to $1.34 billion in the prior-year quarter. The company concluded the year with $1.2 billion in cash and cash equivalents. These are the recent developments for Hess Corporation.
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