How are energy investors positioned?
On Wednesday, Citi analysts increased the price target on Expand Energy stock (NASDAQ:EXE) to $125 from the previous $115, while maintaining a Buy rating on the shares.
The adjustment followed a revision of the company's earnings model, which now anticipates a discretionary cash flow of approximately $802.3 million, slightly below the consensus estimate of around $830.4 million.
Citi's analysis indicates that Expand Energy's production and operating expenses are expected to align closely with consensus estimates, hovering near the mid-point of the company's guidance.
Capital expenditures are projected to be somewhat lower than anticipated. The upcoming earnings call is likely to address the timeline for the resumption of incremental drilling activities, which the firm views as a second half of the year event, and the path of production growth through the use of the company's inventory of drilled but uncompleted wells (DUCs) and deferred tax liability investments (DTILs). The latter is anticipated to be responsive to front-month pricing trends.
"We retain our Buy rating while increasing our target price to $125/share given strong current fundamentals and nearing line-of-sight to further pricing strength through the year," the analysts said.
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