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On Wednesday, Morgan Stanley (NYSE:MS) upgraded Range Resources Corporation (NYSE:RRC) shares, moving the stock rating from Underweight to Equalweight and raising the price target to $49.00, up from the previous $40.00. The stock, currently trading near its 52-week high of $41.95, has shown strong momentum with a 33.7% return over the past six months. According to InvestingPro analysis, the company maintains a GOOD overall financial health score, though current valuations suggest the stock may be trading above its Fair Value. Stifel analysts cited the company’s three-year outlook, which aims for capital efficient production growth, as a key reason for the rating change. Range Resources is expected to increase production volumes by 20% by 2027 while maintaining an investment rate below 50%. With a market capitalization of $9.69 billion and a moderate debt-to-equity ratio of 0.46, the company appears well-positioned to execute its growth strategy.
The company has set a goal to boost production from 2.2 billion cubic feet equivalent per day (Bcfe/d) in 2025 to 2.6 Bcfe/d by 2027, with an annual capital expenditure (capex) ranging between $650 million and $700 million for the period of 2025 to 2027. Beyond 2027, Range Resources anticipates it can sustain this level of production with approximately $570 million in drilling and completion (D&C) capex, which is in line with last year’s spending of about $580 million D&C, despite the forecasted increase in volumes.
The company’s access to export markets has been a contributing factor to its success, particularly in achieving premium natural gas liquids (NGL) realizations. Over the past few years, Range Resources has consistently realized a roughly $1.80 per barrel premium to the benchmark Mont Belvieu prices. Analysts expect this trend to continue, supporting the company’s financial performance.
Morgan Stanley’s updated assessment reflects a view that the combination of capital efficient growth and stronger natural gas prices aligns Range Resources’ valuation more closely with its industry peers. The revised rating and price target suggest a more balanced risk-reward scenario for the company’s stock moving forward. For deeper insights into Range Resources’ valuation metrics and growth potential, InvestingPro subscribers can access comprehensive analysis including 8 additional ProTips and detailed financial metrics in the Pro Research Report, helping investors make more informed decisions.
In other recent news, Range Resources Corporation reported a significant development as Moody’s upgraded its Corporate Family Rating to Ba1 from Ba2, reflecting the company’s solid operational performance and improved leverage. This upgrade underscores Range’s ability to generate free cash flow even in low gas price environments, supported by a disciplined hedging strategy and reduced debt levels. Additionally, Benchmark analysts maintained a Hold rating on Range Resources’ stock, projecting the company will outperform consensus estimates with an earnings per share of $0.92 and EBITDA of $426 million for the first quarter. This forecast is attributed to favorable post-hedge gas realizations and significant gains from swaps.
Furthermore, Range Resources announced a 12.5% increase in its quarterly cash dividend, raising it to $0.09 per share, reflecting the company’s commitment to delivering value to shareholders. In leadership news, Range Resources appointed Christian S. Kendall, former CEO of Denbury Inc., to its Board of Directors, enhancing its governance and strategic capabilities. Meanwhile, JPMorgan adjusted its price target for Range Resources shares to $43.00, citing the company’s strategic plan to boost production modestly in 2026-27 and its advantageous tax position expected to improve cash flows significantly.
The company also highlighted its capital expenditure plans, with forecasts ranging between $650 million and $700 million over the next three years, maintaining its operational pace with two rigs and one frac crew. Range Resources plans to utilize its extensive inventory and newly acquired long-haul transportation to support growth, aligning with its strategic objectives. These recent developments reflect Range Resources’ ongoing efforts to strengthen its financial and operational standing in the energy sector.
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