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On Tuesday, Citi reaffirmed a positive stance on Talos Energy (NYSE:TALO) shares, maintaining a Buy rating and a $14.50 price target. The endorsement comes following the company’s announcement on Monday regarding the appointment of Paul Goodfellow as the new CEO, effective March 1, 2025. With over three decades of industry experience, Goodfellow’s expertise includes managing a diverse and global deepwater business. According to InvestingPro data, Talos Energy, currently valued at $1.72 billion, trades near its 52-week low of $8.88, with analyst targets ranging from $11 to $21.
Citi analysts expect that Goodfellow’s leadership will signal a clearly defined strategic direction for Talos Energy, likely encompassing both inorganic growth and international expansion. Although the upcoming conference call is anticipated to address the company’s strategic trajectory, analysts do not foresee any significant revelations due to the recent timing of the CEO transition. InvestingPro subscribers can access detailed analysis and 6 additional ProTips about Talos’s financial health and growth prospects.
The investment firm’s continued support for the Buy rating and the set price target is grounded in Talos Energy’s efforts to reduce debt, which have been facilitated by robust free cash flow (FCF) generation and consistent operational performance. The company maintains a strong gross profit margin of 70.11% and has remained profitable over the last twelve months. Citi analysts believe that these factors, coupled with the potential for substantial gains, provide a counterbalance to the risks posed by an unpredictable pricing environment in the energy sector.
In other recent news, Talos Energy has been the subject of several recent developments. Benchmark analysts maintained their Buy rating for Talos Energy, adjusting their fourth-quarter earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates for the company to $0.09 and $329 million, respectively. They also projected the company’s production volumes in 2025 to be slightly higher than in 2024 and anticipate lower capital expenditures than initially discussed.
Meanwhile, JPMorgan analyst Arun Jayaram increased the price target for Talos Energy shares to $13.00, following the company’s announcement of positive drilling results. Jayaram projected Talos Energy’s fourth-quarter cash flow per share (CFPS) at $1.51 and estimated EBITDA at $317 million. The company is expected to generate $88 million in free cash flow (FCF) for the quarter.
In other developments, Talos Energy announced a significant oil and gas discovery at the Katmai West #2 well in the Gulf of Mexico. The company also agreed to reduce its borrowing base and total commitments to $925 million, a move that reflects proactive management of its capital structure and liquidity.
Finally, JPMorgan initiated coverage on Talos Energy with a Neutral rating, citing a balanced outlook amid CEO uncertainty. These are recent developments, and as always, investors are advised to conduct their own comprehensive research before making investment decisions.
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