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Piper Sandler maintained its Overweight rating and $19.00 price target on Permian Resources Corp (NYSE:PR) Monday. The firm identified PR as one of its "favorite names" in the exploration and production sector, citing enhanced reinvestment opportunities following recent acquisitions in the New Mexico Delaware Basin. With a current market capitalization of $10.28 billion and trading at $14.49, InvestingPro analysis suggests the stock is currently undervalued, trading at an attractive PEG ratio of 0.22.
The research firm’s analysis showed weakening oil cumulative results for Permian Resources, with six-month oil cumulative production of 139 thousand barrels (normalized to 10,000 feet) for fiscal year 2024, down from 155 thousand barrels in fiscal year 2023. Three-month oil cumulative production reached 62 thousand barrels, compared to figures ranging from 75 to 97 thousand barrels in fiscal years 2022 through 2024. Despite production challenges, the company maintains strong financial metrics, with a robust gross profit margin of 75.13% and impressive revenue growth of 37% over the last twelve months.
Piper Sandler noted an increased Bone Spring formation allocation in Permian’s New Mexico operations during fiscal years 2024 and 2025. At current strip pricing, the firm models a 68% internal rate of return, $10.5 million net present value per well, and a ten-month payback assuming $700 per foot drilling and completion costs.
Permian Resources announced with its first quarter results the acquisition of New Mexico assets from APA for $608 million. The acquisition includes approximately 12 thousand barrels of oil equivalent per day (45% oil) and more than 100 gross two-mile drilling locations.
The acquired assets comprise 13,300 net acres and 8,700 net mineral acres adjacent to Permian’s Parkway asset in Eddy County, New Mexico. The company estimates project breakevens in this area at approximately $30 per barrel WTI crude oil. For detailed analysis of this acquisition and its potential impact on Permian Resources’ valuation, explore the comprehensive Pro Research Report available on InvestingPro, which provides expert insights on over 1,400 US stocks.
In other recent news, Permian Resources Corp. reported its first-quarter earnings for 2025, surpassing analysts’ expectations with earnings per share of $0.44, higher than the forecast of $0.42. Revenue also exceeded projections, reaching $1.38 billion compared to the anticipated $1.37 billion. This strong financial performance was driven by effective cost management and strategic operational improvements. Additionally, RBC Capital Markets adjusted its outlook on Permian Resources, increasing the price target to $17.00 from $16.00, while reaffirming the Outperform rating, citing the company’s operational efficiencies and strategic acquisitions.
The company also held its annual shareholder meeting where shareholders approved the election of board directors, executive compensation, and the appointment of KPMG LLP as the independent auditor for the fiscal year ending December 31, 2025. These results reflect shareholder confidence in the company’s governance and financial oversight. Furthermore, Permian Resources announced a strategic acquisition in New Mexico valued at $608 million, expected to enhance free cash flow and operational efficiency. The company’s robust financial position, characterized by a strong balance sheet and substantial cash reserves, positions it favorably in the current market landscape.
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