How are energy investors positioned?
On Thursday, Raymond (NSE:RYMD) James maintained a Strong Buy rating on Crescent Energy (NYSE: CRGY) but reduced the stock’s price target from $23.00 to $18.00. The adjustment follows Crescent’s fourth-quarter results and a decline in oil prices. According to InvestingPro data, the stock has declined about 26% year-to-date, with its RSI suggesting oversold conditions. Analysts at Raymond James have revised their capital expenditure estimates for Crescent Energy downward by 11% after the company decided to move a rig to their southern Eagle Ford dry gas position, capitalizing on the recent surge in natural gas prices.
The analysts noted that Crescent’s overall production estimates remain largely the same, but the increased gas activity has resulted in a slight decrease in the company’s oil weighting compared to previous models. Despite this, Crescent Energy is projected to generate a robust 14% free cash flow to enterprise value (FCF/EV) in 2025. While current EV/EBITDA stands at 5x according to InvestingPro data, the company maintains strong revenue growth of 23% over the last twelve months.
Crescent is currently offering a fixed dividend yield of 4.5%, and analysts expect that the company might initiate share buybacks given its undervalued position. The decrease in the target price to $18.00 is attributed to the significantly lower oil price environment since the last update provided by the analysts. Raymond James reaffirms its confidence in Crescent Energy’s stock with the continued Strong Buy recommendation. For deeper insights into Crescent Energy’s valuation and growth prospects, including additional ProTips and comprehensive financial analysis, check out the detailed Pro Research Report available on InvestingPro.
In other recent news, Crescent Energy Co. reported its fourth-quarter 2024 earnings, with a significant earnings per share (EPS) beat of $1.08, far exceeding the forecasted $0.4616. Despite this strong performance, the company experienced a slight revenue miss, reporting $875.29 million compared to the expected $896.62 million. This revenue shortfall may have contributed to a cautious market response. Crescent Energy also announced a dividend of $0.12 per share, maintaining its commitment to shareholder returns. The company completed the acquisition of Ridgemar Energy, enhancing its operational capabilities in the Eagle Ford and Uinta regions. Analyst firms have not made any recent upgrades or downgrades, but the company’s strategic moves, such as asset acquisitions and divestitures, have been noted. Crescent Energy’s focus remains on free cash flow generation and achieving investment-grade status. These developments highlight the company’s ongoing efforts to strengthen its financial position and operational efficiency.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.