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On Wednesday, JPMorgan analyst Zach Parham revised the price target for Gulfport Energy (NYSE:GPOR) to $210.00, down from the previous target of $211.00, while keeping an Overweight rating on the stock. The adjustment follows a review of the company's expected cash flow and EBITDA for the first quarter of 2025, which JPMorgan anticipates to be 8% below the consensus estimate. Despite recent market pressure, with the stock down nearly 17% in the past week, analyst targets remain bullish, ranging from $190 to $257. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations, with management actively buying back shares to support shareholder value.
Parham notes that the lowered expectations are due to a forecast of 5% less production compared to the Street's estimate. However, JPMorgan's production estimates remain largely unchanged from prior models and align with Gulfport Energy's provided details on production cadence in their fourth quarter 2024 report. The analyst suggests that the broader market may not be accurately modeling the company's production and capital expenditure trajectory throughout the year. With a market capitalization of $2.8 billion and last twelve months EBITDA of $464 million, Gulfport maintains a moderate debt level with a debt-to-capital ratio of 0.2.
Gulfport Energy reported no new wells starting production (TILs) in the fourth quarter of 2024, with only two pads expected to come online late in the first quarter of 2025. These had a minimal impact on first-quarter production volumes. In late first quarter, the company began production from a four-well wet gas pad in western Harrison County and a three-well dry gas pad in northern Monroe County.
JPMorgan estimates Gulfport Energy's production for the first quarter of 2025 at 936 million cubic feet equivalent per day (MMcfe/d), which is an 11% decrease quarter over quarter and 5% below the Street's estimate of 981 MMcfe/d. Despite this, the firm believes that Gulfport Energy's full-year 2025 program is on track, with a production estimate of 1,047 MMcfe/d, which is close to the company's guidance range and only 1% below the consensus estimate of 1,060 MMcfe/d.
For 2025, Gulfport Energy plans to focus approximately 50% of its capital expenditures on developing wet gas and liquids areas, with guidance indicating more than 30% year-over-year growth in liquids volume. Given recent fluctuations in commodity prices, JPMorgan would not be surprised if Gulfport Energy slightly shifts its focus back to dry gas drilling in 2026. The upcoming earnings call, scheduled for May 6, is expected to provide insights into management's perspective on activity levels beyond 2025. InvestingPro subscribers can access comprehensive analysis of Gulfport's financial health, with additional ProTips and detailed metrics available in the Pro Research Report, part of the platform's coverage of over 1,400 US stocks.
In other recent news, Gulfport Energy reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $4.74, which exceeded the forecasted $4.32. However, the company's revenue of $239.87 million fell significantly short of the anticipated $334.06 million. Analysts at Evercore ISI have updated their financial outlook for Gulfport Energy, increasing the stock price target to $190 from $170, while maintaining an In Line rating, citing recent commodity prices and strategic discussions with the company. Meanwhile, BofA Securities has adjusted its price target for Gulfport Energy to $224 from $227, maintaining a Buy rating, with confidence in the company's strong free cash flow yield. TD Cowen also increased the stock price target to $187 from $185, maintaining a Hold rating, following Gulfport Energy's earnings release. The company plans to maintain flat total production while increasing liquids production by 30% in 2025. Gulfport Energy is expected to use its substantial cash generation capacity to buy back 16% of its shares outstanding, as noted by BofA Securities. These developments reflect a mixed but optimistic view of Gulfport Energy's financial strategies and future performance.
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