On Friday, Truist Securities updated its stance on shares of CNX Resources (NYSE:CNX), increasing the stock's price target from $34.00 to $35.00 while maintaining a Hold rating.
The adjustment comes after CNX Resources announced the acquisition of approximately 21,000 undeveloped acres and around 185 million cubic feet equivalent per day (mmcfepd) of production from the privately-held Apex Energy II.
The analyst from Truist Securities noted that the transaction was completed at a commendable approximate 3.3 times EBITDA, based on recent strip pricing. Although the deal is relatively small and is not expected to significantly affect CNX Resources' share price, it suggests a strategic shift in management's approach.
The analyst pointed out that the company appears to be exploring value in select external assets, signaling a potential departure from its previous focus on share repurchases alone.
The acquisition is also seen as an indicator of CNX Resources' continued confidence in its stacked pay development strategy. The analyst explained that after incorporating the new acquisition into their estimates, the revised price target of $35 reflects the updated outlook.
CNX Resources has not made any public comments regarding the price target change or the acquisition. The market's reaction to the updated price target and the strategic implications of the acquisition will be observed in the upcoming trading sessions. Truist Securities' latest price target suggests a conservative view of the stock's potential, aligning with the Hold rating that remains in place.
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