Japan records surprise trade deficit in July as exports weaken further
Investing.com - Morgan Stanley downgraded Northern Oil and Gas (NYSE:NOG) from Equalweight to Underweight on Monday, while reducing its price target to $27.00 from $29.00. The stock, currently trading at $24.34, offers a notable 7.4% dividend yield and trades at a P/E ratio of 4x. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimate.
The downgrade follows Northern Oil and Gas’s second-quarter earnings call, where the company lowered its production guidance for both oil and total production for the remainder of 2025, indicating lower second-half production compared to previous forecasts.
Morgan Stanley noted that the production changes reflect shut-ins and fewer completions, primarily in the Bakken region, which will also negatively impact 2026 volume estimates.
The investment bank expressed concern about potential further reductions in non-operated activity if oil prices decline, adding another risk factor for the company’s outlook.
Based on 2026 estimates, Morgan Stanley calculates that Northern Oil and Gas trades at a premium to peers with a 4.0x EV/EBITDAX multiple versus the coverage oil E&P peer median of 3.6x, while offering a lower free cash flow yield of 6% compared to the peer median of 12% and carrying higher leverage with a net debt/EBITDAX ratio of 2.1x versus the peer median of 0.8x.
In other recent news, Northern Oil & Gas Inc. reported impressive financial results for the second quarter of 2025. The company achieved an earnings per share (EPS) of $1, which surpassed the market forecast of $0.95, representing a 5.26% positive surprise. Additionally, Northern Oil & Gas reported revenue of $706.81 million, significantly exceeding the expected $526.63 million, marking a 34.21% surprise. These results highlight the company’s strong financial performance during the period. Despite these positive earnings and revenue figures, the company’s stock experienced a decline in post-market trading, aligning with broader market trends and investor sentiment. The recent developments provide valuable insights for investors monitoring Northern Oil & Gas.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.