Mizuho lifts Expand Energy stock target to $132, keeps Outperform

On Thursday, Mizuho (NYSE:MFG) Securities expressed a positive outlook on Expand Energy (NASDAQ:EXE) by raising its price target to $132 from $128 and maintaining an Outperform rating. The stock, currently trading at $102.43, has shown impressive momentum with a 41.2% gain over the past six months. According to InvestingPro data, analyst targets range from $86 to $146, with 8 analysts recently revising their earnings expectations upward for the upcoming period. The firm’s analyst highlighted that the company’s fourth-quarter update for 2024 indicated a productive use of its capacity to increase gas volumes as anticipated. Furthermore, Expand Energy, with its substantial market capitalization of $23.67 billion, is investing approximately $300 million to prepare for growth in 2026. InvestingPro analysis indicates the company operates with a moderate debt level and maintains a fair overall financial health score.

The analyst noted that while the expected incremental increase of 300 million cubic feet per day (mmcfe/d) in 2026 compared to the forecasted 7.1 billion cubic feet per day (bcfe/d) in 2025 might seem modest, it is unlikely to significantly alter the macro outlook for the industry. The investment is seen as a strategic move to optimize the company’s operational momentum and cash generation, assuming a mid-cycle price range of roughly $3.50 to $4.00 per million British thermal units (mmbtu). The company’s EBITDA stands at $949 million for the last twelve months, though it trades at a relatively high EBITDA multiple.

Expand Energy’s financial strategy also includes a strong focus on shareholder returns. The company plans to allocate 75% of its excess cash flow, which could reach an additional $700 million if gas prices rise by $0.50/mmbtu in 2025, to its shareholders under an enhanced cash return framework. The company currently offers a dividend yield of 2.38%, with its stock trading near its 52-week high of $109.47.

The analyst’s commentary concluded with a reaffirmation of the Outperform rating and an updated net asset value (NAV)-based price target of $132, up from the previous target of $128. This adjustment reflects the company’s growth initiatives and its ability to maintain significant exposure to higher gas prices, which is expected to benefit both the company’s operational efficiency and its shareholders.

In other recent news, Expand Energy Corporation reported fourth-quarter earnings that exceeded analyst expectations. The company posted an adjusted earnings per share of $0.55, surpassing the anticipated $0.43. Revenue also came in strong at $2 billion, above the consensus estimate of $1.85 billion. In addition to these financial results, Expand Energy increased its synergy target for 2025 by $175 million, aiming for approximately $400 million. The company plans to achieve $500 million in annual synergies by the end of 2026. Expand Energy also announced its 16th consecutive quarterly base dividend of $0.575 per common share. These developments reflect the company’s strategic focus and operational efficiency. The company expects to produce about 7.1 billion cubic feet equivalent per day in 2025, with significant investments planned for future productive capacity.

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