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On Thursday, JPMorgan increased its price target for Range Resources (NYSE:RRC) shares to $43.00 from $40.00, while maintaining an Underweight rating on the stock. The company, currently valued at $9.3 billion, has seen its shares surge over 30% in the past six months. The adjustment follows the company’s announcement of a strategic plan to modestly boost production in 2026-27. According to InvestingPro analysis, the stock appears overvalued at current levels, though 6 analysts have recently revised their earnings estimates upward. Range Resources intends to utilize its extensive inventory, solid balance sheet, and newly acquired long-haul gas and NGL transportation to support this growth.
CFO Mark Scucchi highlighted Range Resources’ advantageous tax position, which includes $1.4 billion in federal net operating losses (NOLs) and $770 million in Pennsylvania NOLs. These tax benefits are expected to improve cash flows by over $300 million in the next two years, aligning with JPMorgan’s projections. InvestingPro data shows the company maintains a moderate debt level with a debt-to-equity ratio of 0.46, while generating $316 million in levered free cash flow over the last twelve months. The company anticipates a low single-digit cash tax rate in 2025-26, which is expected to rise to the high teens in 2027 and beyond.
The company has secured transportation that aligns with its current portfolio, which is 80% outside the basin, and includes a larger proportion of Midwest versus Gulf Coast transport. JPMorgan believes the transportation was mainly obtained on the Rover pipeline, which they estimate includes transport costs of $0.75 per Mcf.
In 2024, Range Resources operated with two rigs and one frac crew, investing $654 million in capital to produce 2.18 Bcfe/d. The company drilled 800,000 lateral feet, surpassing its target of 600,000 feet needed to maintain production levels. A 6% improvement in stages per day was also noted. For 2025, the company plans a capital expenditure of $670 million, which includes maintenance, land acquisition, growth capital, and environmental capex. By the end of 2025, Range Resources expects to have about 30 drilled but uncompleted wells (DUCs), totaling 400,000 lateral feet.
Over the next three years, the company’s capital expenditure is forecasted to be between $650 million and $700 million, maintaining the activity pace of two rigs and one frac crew. CEO Jeff Ventura anticipates an increase in the proportion of completion spending within the three-year plan. The company also estimates its long-term sustaining capital expenditure at $570 million, which is lower than the 2024 rate of approximately $0.74 per Mcfe. With a gross profit margin of 40.2% and analysts forecasting EPS of $3.69 for FY2025, the company shows promising financial metrics. For deeper insights into Range Resources’ financial health and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, Range Resources Corp . reported its fourth-quarter 2024 earnings, showing mixed results. The company achieved an earnings per share (EPS) of $0.68, surpassing the forecast of $0.58, which indicates effective cost management. However, revenue was below expectations, totaling $626.42 million compared to the projected $693.27 million. Range Resources demonstrated robust free cash flow generation, amounting to $453 million for the year, and successfully reduced net debt by $172 million. The company has also announced a steady capital expenditure plan for 2025, ranging from $650 million to $690 million, focusing on modest production growth. Analysts from firms like RBC and TPH have noted the company’s strategic approach to growth and market dynamics. Despite the revenue shortfall, Range Resources remains committed to returning value to shareholders through dividends and share repurchases. These recent developments reflect the company’s ongoing efforts to maintain operational efficiency and financial resilience.
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