National Fuel Gas stock rating upgraded to Buy by BofA on production gains

Investing.com - BofA Securities upgraded National Fuel Gas (NYSE:NFG) from Underperform to Buy on Tuesday, while raising its price target to $107.00 from $85.00. According to InvestingPro data, NFG has demonstrated strong momentum with a 52.8% return over the past year and is currently trading near its 52-week high of $86.45.

The double upgrade follows BofA’s analysis of recent production data from NFG’s Eastern Development Area, which the company acquired from Shell in 2020.

BofA noted that production is tracking at 2.6 bcf per thousand feet, which is 16% ahead of management’s expectations, demonstrating increasingly better productivity since the acquisition.

The improved production efficiency is expected to enable a more capital-efficient program through the end of the decade, according to BofA’s analysis.

BofA now forecasts a 5% production CAGR for National Fuel Gas, compared to the 3% consensus estimate, while drilling and completion capital expenditure is projected to decline 10% from $504 million to $422 million by 2027.

In other recent news, National Fuel Gas Company reported its second-quarter 2025 earnings, exceeding Wall Street expectations with an earnings per share (EPS) of $2.39, compared to the forecasted $2.15. Despite revenue coming in at $729.95 million, slightly below the forecast of $768.23 million, the company raised its earnings guidance for the fiscal year, reflecting confidence in its future performance. Analysts at Raymond (NSE:RYMD) James maintained a Market Perform rating on the company, noting a slight downward adjustment in earnings estimates due to a weaker gas strip. The firm also projected a slight increase in fiscal year 2025 production, aligning with National Fuel Gas’s new guidance.

Additionally, National Fuel Gas announced a 3.9% increase in its quarterly dividend, marking the 55th consecutive year of dividend increases. The company also appointed Donna L. DeCarolis as a consultant following her retirement as President of National Fuel Gas Distribution Corporation. She will provide consulting services until July 2028, focusing on New York State energy policy matters. In a separate development, New Found Gold Corp. reported significant high-grade gold intercepts from its Queensway Gold Project in Newfoundland and Labrador. The company plans to continue its work program, with a preliminary economic assessment expected to be completed in early Q3 2025.

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