Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
Investing.com - Raymond (NSE:RYMD) James raised its price target on Mach Natural Resources (NYSE:MNR) to $22.00 from $21.00 on Monday, while maintaining a Strong Buy rating on the stock. Currently trading at $14.99, InvestingPro data shows the stock appears undervalued, with analysts setting targets between $21-25.
The firm cited Mach’s recently announced acquisitions of Sabinal Energy and IKAV Energy for a combined $1.3 billion as the reason for the target increase. These acquisitions will be funded with $762 million in MNR common units and $525 million from cash on hand and credit borrowings. The company, currently valued at $1.77 billion market cap, maintains a strong financial health score according to InvestingPro analysis.
Raymond James projects the deals will be 8% accretive to Mach’s 2026 estimated distributable cash flow per unit and 11% accretive in 2027, partly due to lower debt repayments.
The transactions are expected to close during the third quarter of 2025 and will provide Mach with added scale through an 88% increase in production, entry into two new basins, and a lower base decline rate of 15% compared to 20% previously.
Raymond James forecasts a 2025 distribution yield of 16% and a 2026 distribution yield of 17% for Mach Natural Resources.
In other recent news, Mach Natural Resources LP reported its Q1 2025 earnings, which revealed a notable miss on both earnings per share (EPS) and revenue compared to analyst expectations. The company’s EPS was $0.54, significantly below the forecasted $0.98, while revenue came in at $227 million, missing the anticipated $270.95 million. Despite these results, Mach Natural Resources is shifting its drilling focus towards natural gas, particularly in the Deep Anadarko Basin. The company recently completed the acquisition of assets from XTO, adding 1 million acres and 1,600 barrels of oil equivalent per day to its portfolio. This acquisition aligns with Mach’s strategy of opportunistic acquisitions to bolster cash flow and enhance its drilling budget for 2026. Furthermore, the company has successfully reduced its net debt to EBITDA ratio from 1.0x to 0.7x through refinancing efforts, which are expected to save $22 million in projected interest expenses for 2025. Analyst commentary from firms like Johnson Rice and Raymond James highlighted these strategic shifts and acquisitions, indicating a potential for growth in natural gas production. Overall, these developments reflect Mach Natural Resources’ focus on strategic acquisitions and financial optimization.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.