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Piper Sandler maintained its Overweight rating and $36.00 price target on Coterra Energy (NYSE: NYSE:CTRA) Monday, aligning with broader analyst sentiment that shows an average price target of $40 on the high end. According to InvestingPro analysis, CTRA currently appears undervalued based on its Fair Value estimate. The firm identified Coterra as one of its favorite exploration and production companies, highlighting enhanced reinvestment opportunities following recent acquisitions in the New Mexico Delaware Basin.
Following first-quarter 2025 results, Coterra reiterated its fiscal year 2025 oil volume and Permian capital expenditure guidance. With a robust gross profit margin of 74.4% and an impressive track record of 36 consecutive years of dividend payments, as noted by InvestingPro, the company maintains strong operational flexibility. The company has reallocated some Delaware Basin capital expenditure to the Marcellus formation and shifted allocation to the Western Corridor after pausing Harkey completions due to mechanical issues encountered on five wells in early second quarter 2025.
Piper Sandler’s analysis showed Coterra’s six-month oil cumulative production (including Franklin Mountain and Avant assets) from fiscal years 2021 through 2024 measured 212, 201, 156, and 178 thousand barrels respectively, when normalized to 10,000 feet.
The firm also examined Coterra’s newly acquired assets separately, finding Avant’s six-month oil cumulative production from fiscal years 2022 through 2024 at 249, 125, and 143 thousand barrels (normalized to 10,000 feet). Franklin Mountain’s production for the same periods measured 163, 117, and 124 thousand barrels respectively.
Comparing legacy operator well depths, Piper Sandler noted Franklin Mountain’s completions were deeper in fiscal years 2022-2024 at 12,000-13,000 feet, compared to second half 2023-fiscal year 2025 wells being shallower at 9,000-12,000 feet, with Avant and Coterra wells scattered throughout this depth range. Operating with a moderate debt-to-equity ratio of 0.32 and maintaining a "GOOD" overall financial health score according to InvestingPro, Coterra appears well-positioned to execute its operational strategy. Get access to 12 more exclusive ProTips and a comprehensive research report for deeper insights into CTRA’s investment potential.
In other recent news, Coterra Energy reported its Q1 2025 earnings, exceeding analysts’ expectations with an EPS of $0.80 against a forecast of $0.74. However, the company’s revenue fell short, recording $1.9 billion compared to the expected $1.92 billion. Despite the revenue miss, Coterra Energy’s pre-hedge revenues increased to $2 billion from $1.4 billion in Q4 2024, and the company reported a net income of $516 million. In addition, Coterra Energy announced a reduction in its fiscal year 2025 capital expenditure expectations by 4%, adjusting its capex guidance to $2.2 billion from the previous $2.3 billion. JPMorgan analyst Arun Jayaram revised the price target for Coterra Energy, lowering it to $32 from $34, while maintaining an Overweight rating on the stock. The analyst noted the company’s plans to remove three Permian rigs in the Delaware Basin, impacting capex by approximately $120 million, though activity in the Marcellus region is set to increase by $50 million. Despite operational challenges, Coterra Energy remains focused on maintaining its full-year production guidance.
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