Mizuho maintains Neutral rating on Magnolia Oil & Gas stock at $26

Investing.com - Mizuho (NYSE:MFG) has reiterated its Neutral rating and $26.00 price target on Magnolia Oil & Gas Corp. (NYSE:MGY), citing the company’s decision to defer some second-half 2025 turn-in-line activity to 2026.

The research firm noted that despite higher oil prices since Magnolia’s first-quarter update, the company remains committed to deferring some activities as it is already operating at the higher end of its long-term growth target, helped by stronger well performance and with approximately 5% less capital versus its original 2025 guidance. The company maintains a healthy financial position with a moderate debt level and impressive gross profit margin of 83%.

At current strip prices, Mizuho forecasts Magnolia will spend approximately 50% of its 2025 estimated EBITDX, which falls within the company’s targeted threshold of approximately 55%.

Mizuho indicated it is seeking updated commentary on Magnolia’s remaining opportunity for bolt-on and working interest acquisitions in Giddings and broader perspectives on Eagle Ford consolidation.

The firm observed that while Magnolia shares have lagged peers in the recovery from recent bottoms in April, they have still meaningfully outperformed year-to-date, with current valuation appearing fair as MGY trades at more than 1.5 times premium on EV/EBITDX, reflecting strong execution, low leverage, and above-average cash returns. The company’s EV/EBITDA ratio stands at 4.87x, with a strong return on equity of 21%.

In other recent news, Magnolia Oil & Gas Corp reported its first-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.54 compared to the forecasted $0.53. The company’s revenue also surpassed projections, reaching $350.3 million against a forecast of $336.58 million. UBS raised its price target for Magnolia Oil & Gas to $29.00 from $26.00, maintaining a Buy rating and highlighting the company’s consistent share buybacks and capital-efficient growth. Meanwhile, Citi reiterated its Sell rating on Magnolia, projecting discretionary cash flow slightly below consensus estimates and noting potential acquisition opportunities in the Eagle Ford region.

The company’s annual meeting results showed all eight director nominees were elected, and stockholders approved an advisory resolution on executive compensation. Magnolia’s board also decided to hold annual say-on-pay votes starting with the 2026 meeting. The appointment of KPMG LLP as the independent auditor for 2025 was ratified. Magnolia reported a record production rate and a 9% year-over-year increase in adjusted net income, with a disciplined approach to capital spending. The company increased its full-year production growth guidance to 7-9% and reduced capital spending estimates, reflecting operational efficiencies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.