Crescent Energy stock rating reiterated by KeyBanc, citing strong Q2 results

Investing.com - KeyBanc has reiterated an Overweight rating on Crescent Energy (NYSE:CRGY) following the company’s strong second-quarter performance and improved efficiency outlook for 2025. According to InvestingPro data, the company maintains a "Fair" overall financial health score, with analysts setting price targets between $10 and $20.

The energy company reported significant cost reductions in its drilling operations, with well costs per foot decreasing by 15% in the Eagle Ford Shale and 12.5% in the Uinta Basin compared to 2024 levels. These efficiencies have enabled Crescent Energy to reduce its 2025 capital budget by 3% while maintaining its production guidance. The company’s revenue grew 31.6% in the last twelve months, though InvestingPro analysis indicates rapid cash burn remains a concern.

Despite a 39% year-to-date decline in share price (compared to the XOP index’s 6% drop), Crescent Energy reduced its net debt by $220 million quarter-over-quarter, though leverage remains at 1.5x. The company’s dividend of $0.48 per share represents a 5.4% yield at current prices. With total debt of $3.6 billion and a debt-to-equity ratio of 1.11, the company operates with a significant debt burden.

KeyBanc expects Crescent Energy to exceed management’s guidance of at least $250 million in asset sales this year. The firm believes these potential sales could include conventional Rockies assets or minerals assets that may not be reflected in the current share price.

The investment bank views accretive asset sales as an important driver for transferring value from debt to equity for Crescent Energy in the latter half of 2025, complementing organic free cash flow generation from a more efficient South Texas drilling program.

In other recent news, Crescent Energy Company reported second-quarter earnings that significantly exceeded analyst expectations. The company posted adjusted earnings per share of $0.43, surpassing the analyst consensus of $0.28 by 54%. Revenue for the quarter reached $897.98 million, which was higher than the projected $877.82 million, highlighting Crescent Energy’s operational strength. These results have contributed to an enhanced financial outlook for the company. The robust earnings and revenue figures underscore Crescent Energy’s strong performance in the oil and gas sector. Analyst firms have noted the company’s impressive results, which have positively influenced investor sentiment. These developments are part of the recent updates surrounding Crescent Energy.

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