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Investing.com - Piper Sandler reduced its price target on Comstock Resources (NYSE:CRK) to $10.00 from $12.00 on Monday, while maintaining an Underweight rating on the natural gas producer. The new target represents a significant downside from the current price of $16.38, though analyst targets range widely from $10 to $32. According to InvestingPro data, the stock has already declined over 20% in the past week.
The downward revision follows Comstock’s challenging second quarter of 2025, which resulted in delayed well completions and infrastructure constraints affecting production capabilities. The company has reduced its fiscal year 2025 production guidance by 6% while maintaining its capital expenditure forecast. InvestingPro analysis reveals concerning liquidity metrics, with short-term obligations exceeding liquid assets and a significant debt burden, potentially complicating the company’s operational challenges.
Piper Sandler lowered its production forecasts for fiscal years 2025 and 2026 by 4% and 6%, respectively. The firm projects minimal free cash flow of approximately $20 million for Comstock at a natural gas price of $4 per MMBtu.
The investment bank expressed concerns about Comstock’s Western Haynesville investments, noting that these resources may not deliver competitive returns at Piper Sandler’s mid-cycle price forecast of $3.50 per MMBtu.
Piper Sandler indicated that a substantial reduction in costs or improved supply/demand fundamentals driving prices above $4 would be necessary for a more constructive outlook on the stock.
In other recent news, Comstock Resources reported its Q2 2025 earnings, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $0.13, surpassing the forecasted $0.10, marking a 30% surprise. Revenue also outperformed projections, reaching $470.26 million compared to the anticipated $425.44 million. Despite these positive financial results, concerns remain among investors regarding operational challenges and future guidance. The company’s stock experienced a decline in post-earnings trading, although this movement is not the focus here. These developments come amid a backdrop of fluctuating market conditions and investor sentiment. Analysts continue to monitor Comstock Resources closely, with some firms potentially adjusting their recommendations based on these outcomes.
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