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Investing.com - Mizuho maintained its Outperform rating and $45.00 price target on Civitas Resources (NYSE:CIVI) as the company reportedly explores a potential sale. Currently trading at $32.50, InvestingPro analysis suggests the stock is significantly undervalued, with analyst targets ranging from $30 to $53.
According to Mizuho, Bloomberg reported that Civitas Resources is working with advisers to explore a potential sale. This development follows the recent and unexpected departure of CEO Chris Doyle, with the board currently searching for a permanent successor.
The company has experienced additional leadership changes, including the departure of its previous COO earlier this year. Clay Carrell, former COO of SWN, joined Civitas as the new COO in May.
Mizuho views Civitas’s inventory as competitive compared to peers but notes the company has faced recent operational execution challenges. These issues present an opportunity for a new management team, which could also appeal to potential buyers.
The research firm identified Civitas’s multi-basin portfolio spanning the DJ Basin and Permian, along with above-average financial leverage, as potential obstacles to a deal. Despite these challenges, Mizuho observed strong appetite for continued exploration and production consolidation in the sector.
In other recent news, Civitas Resources reported its Q2 2025 earnings, exceeding earnings per share (EPS) expectations with a reported $1.34, compared to the forecasted $1.11, marking a 20.72% surprise. However, the company experienced a slight revenue shortfall during the same period. Additionally, Civitas Resources is exploring a potential sale to enhance its scale in the shale industry, working with advisers to consider a merger with a similarly sized or larger peer.
Morgan Stanley downgraded Civitas Resources from Overweight to Equalweight, citing a recent rally that limits further upside potential, and set a price target of $40.00. Meanwhile, William Blair initiated coverage on the company with a Market Perform rating, noting significant recent changes but expressing concerns about substantial free cash flow until mid-2026. Piper Sandler adjusted its price target for Civitas Resources to $52.00 from $54.00, maintaining an Overweight rating based on discussions about production forecasts and financial expectations. These developments reflect the company’s ongoing strategic adjustments and market perceptions.
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