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Investing.com - KeyBanc raised its price target on Matador Resources Company (NYSE:MTDR) to $62.00 from $60.00 on Friday, while maintaining an Overweight rating on the oil and gas producer’s stock. Currently trading at $50.65, InvestingPro analysis suggests the stock is undervalued, with analysts setting targets ranging from $48 to $89.
The price target increase follows Matador’s recent earnings report, which KeyBanc viewed positively despite the stock’s 1.2% decline on Wednesday when the broader XOP index gained 0.7%. The firm attributed the sell-off to trading-oriented accounts that may have expected news about strategic decisions for the company’s Midstream segment. With a strong gross profit margin of 78.6% and diluted earnings per share of $6.81 over the last twelve months, InvestingPro data reveals robust underlying fundamentals.
KeyBanc expressed encouragement about drilling efficiencies being achieved by Matador and the performance of its Midstream segment. The firm expects more definitive news regarding the Midstream segment by year-end 2025 and characterized Wednesday’s sell-off as a buying opportunity for long-term investors. This view is supported by the company’s consistent dividend growth, having raised its dividend for 5 consecutive years, with a current yield of 2.47%.
While KeyBanc trimmed EPS estimates to reflect updated DD&A and other non-cash modeling assumptions, it increased EBITDA projections based on the view that efficient growth can continue amid lower well costs resulting from drilling efficiencies.
The new $62 price target reflects a target 4.3x 2025E EV/EBITDA multiple for Matador Resources, according to KeyBanc’s analysis.
In other recent news, Matador Resources Company reported its second-quarter earnings for 2025, exceeding expectations on earnings per share (EPS) but falling short on revenue. The company announced an EPS of $1.53, surpassing the projected $1.44. However, Matador Resources reported revenue of $815.77 million, which did not meet the anticipated $908.61 million. These figures highlight a mixed financial performance, with the company achieving higher-than-expected earnings but struggling with revenue targets. The revenue shortfall has raised concerns among investors, despite the positive EPS outcome. These recent developments reflect the company’s current financial standing and investor sentiment.
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