Northern Oil and Gas stock price target lowered to $34 at Raymond James

Investing.com - Raymond (NSE:RYMD) James has lowered its price target on Northern Oil and Gas (NYSE:NOG) to $34.00 from $36.00 while maintaining a Strong Buy rating. Currently trading at $23.24, InvestingPro analysis suggests the stock is undervalued, with a P/E ratio of just 3.78x and an attractive dividend yield of 7.75%.

The firm updated its estimates following Northern Oil and Gas’s second quarter 2025 results. For the fiscal year 2025 outlook, NOG reduced its capital expenditure guidance by approximately 12% while lowering its total production guidance by about 1% and oil volumes by roughly 3%. The company maintains a significant debt burden, with a debt-to-equity ratio of 0.98x, though it maintains a healthy current ratio of 1.21x.

Raymond James noted that the production adjustments were primarily due to Williston operators deferring completions in a weaker oil price environment. The firm is modeling fiscal year 2025 capital expenditure of approximately $987.5 million, which aligns with both company guidance and Street expectations.

The research firm highlighted that NOG’s robust wells in process inventory (53) at the end of the second quarter relative to guidance implies either a significant drilled but uncompleted wells build or potential second-half 2025 production beat. Raymond James is modeling fiscal year 2025 total production of approximately 134,000 barrels of oil equivalent per day and liquids volumes of approximately 76,000 barrels per day, both at the high end of guidance.

The price target reduction to $34 from $36 was attributed to a lower commodity price strip since Raymond James’s last publication, though the firm emphasized that NOG’s valuation remains attractive at 2025/2026 EV/EBITDA multiples of approximately 2.9x and 3.3x respectively. With an LTM EV/EBITDA of 2.39x and strong dividend growth of 12.5% over the last twelve months, InvestingPro subscribers can access detailed valuation metrics and 7 additional ProTips for deeper analysis of NOG’s investment potential.

In other recent news, Northern Oil and Gas reported strong financial results for the second quarter of 2025. The company announced an earnings per share of $1, surpassing the forecasted $0.95, resulting in a 5.26% surprise. Revenue also exceeded expectations, reaching $706.81 million compared to the anticipated $526.63 million, marking a significant 34.21% surprise. Despite these positive earnings, Morgan Stanley (NYSE:MS) downgraded Northern Oil and Gas from Equalweight to Underweight. This downgrade came after the company lowered its production guidance for oil and total production for the rest of 2025, suggesting reduced production in the second half of the year. Morgan Stanley also adjusted its price target for the company from $29.00 to $27.00. These developments reflect recent trends and adjustments within Northern Oil and Gas and the broader market.

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