Piper Sandler raises Expand Energy price target to $139

On Wednesday, Piper Sandler analyst Mark Lear (NYSE:LEA) increased the price target for Expand Energy (NASDAQ: EXE) shares to $139 from $136, while maintaining an Overweight rating. The new target falls within the current analyst range of $105-$170, with the consensus recommendation leaning strongly bullish at 1.52. Lear’s assessment follows a thorough review of Expand Energy’s first-quarter results, where he emphasized the company’s diverse portfolio and its exposure to near-term and secular demand trends.According to InvestingPro, Expand Energy shows strong momentum with several positive indicators. Subscribers can access 12 additional ProTips and a comprehensive Pro Research Report, offering deeper insights into the company’s prospects.

Lear highlighted Expand Energy’s strong well productivity, particularly in the Southwestern Pennsylvania area, as a key factor for the improved price target. He noted that the company is well-positioned to capitalize on the rising demand for natural gas, which is expected to be driven by increased Liquefied Natural Gas (OTC:LNGLF) (LNG) export capacity along the Gulf Coast and long-term power demand trends.

Despite Expand Energy’s potential for near-term growth in a robust natural gas market, with impressive revenue growth of 35.62% over the last twelve months, Lear pointed out that the company is trading at a significant discount compared to its gas-weighted peers. However, InvestingPro analysis suggests the stock is trading above its Fair Value. He argued that this discount is unwarranted given Expand Energy’s scale, ability to respond to immediate demand, the duration of its core inventory, and its moderate debt levels, with a total debt to capital ratio of 0.16.

Lear also provided a comparison of Expand Energy’s valuation metrics with its peers, noting that Expand Energy’s 2025 estimated strip enterprise value to EBITDA (EV/EBITDA) and free cash flow to enterprise value (FCF/EV) ratios stand at 5.4x and 8.1%, respectively. This is in contrast to its peer group’s average of 7.3x and 6.5%.

The analyst’s positive outlook is reflected in the stock’s year-to-date performance. Expand Energy shares have risen 18% compared to the S&P Oil & Gas Exploration & Production Select Industry Index (XOP), which has seen a 7% decline, and the Henry Hub natural gas prices, which have increased by 20%. Lear’s analysis suggests that Expand Energy is his top gas stock pick, especially after the recent upgrade to an Overweight rating from Neutral.

In other recent news, Expand Energy reported its first-quarter 2025 earnings, surpassing earnings per share (EPS) expectations with an EPS of $2.02, which was 21% above the forecasted $1.67. However, the company fell short on revenue, reporting $2.2 billion against an anticipated $2.49 billion. This revenue miss has raised some concerns among investors. In terms of analyst ratings, Bernstein SocGen initiated coverage on Expand Energy with an Outperform rating, citing a positive outlook on natural gas and potential benefits from the U.S. gas supercycle. The firm also projected that Expand Energy could achieve $500 million in annual savings by 2026 due to operational efficiencies.

Meanwhile, Piper Sandler upgraded Expand Energy from Neutral to Overweight, increasing the price target to $136 from $103. The upgrade reflects confidence in the company’s strategic positioning to capitalize on growing natural gas demand, particularly with LNG export capabilities expanding along the Gulf Coast. Expand Energy is also planning to ramp up its rig count and well completions in the second half of 2025, which is expected to contribute significantly to production growth. Despite trading at a discount compared to peers, analysts at Piper Sandler see potential for growth in Expand Energy’s operations. These developments indicate a robust focus on operational efficiency and strategic market positioning, even as the company navigates the challenges posed by revenue shortfalls.

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