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On Wednesday, Raymond (NSE:RYMD) James reiterated a Strong Buy rating on Permian Resources Corp (NYSE:PR) with a price target of $23.00, following the company’s fourth-quarter results and current commodity price trends. The $11.4 billion market cap company, which has seen 5 analysts revise their earnings estimates upward according to InvestingPro, demonstrated strong operational success by surpassing Wall Street’s expectations in production by 3% and EBITDA by 4%. The company’s impressive 60.23% revenue growth in the last twelve months further validates the analyst’s confidence.
Permian Resources reported a strong fourth quarter, which included the closure of the $180 million Barilla Draw gathering system divestiture. Looking ahead, the company plans to distribute its activities with 65% in New Mexico and 30% in Texas within the Delaware Basin, while the remaining 5% will be allocated to the Midland Basin. This strategic allocation, combined with the company’s robust financial health score of 3.35 out of 5 as reported by InvestingPro, positions the company well for continued growth.
The financial forecast by Raymond James indicates that Permian Resources is set to maintain a capital expenditure that is relatively flat year over year, while still achieving a 9% growth in free cash flow in 2025. The firm’s projection for the company’s 2025 production stands at approximately 372 thousand barrels of oil equivalent per day (kboe/d), with 173 thousand barrels per day (kbbl/d) of that being oil.
The analysts emphasized Permian Resources’ attractive valuation, trading at approximately 3.7 times its fiscal year 2025 enterprise value to EBITDA (EV/EBITDA) ratio. The reaffirmed price target of $23.00 reflects confidence in the company’s continued growth and financial performance.
In summary, Raymond James has expressed a positive outlook on Permian Resources, highlighting the company’s solid operational performance and its prospects for strong free cash flow growth and production increases, all of which underpin the Strong Buy rating and $23.00 price target.
In other recent news, Permian Resources Corp has reported its fourth-quarter 2024 earnings, which showed an earnings per share (EPS) of $0.29, missing the forecasted $0.35. The company’s revenue also fell short of expectations, coming in at $1.3 billion against a forecast of $1.32 billion. Despite these misses, the company achieved record free cash flow per share and maintained a strong liquidity position with $3 billion, including $500 million in cash. In terms of analyst ratings, Benchmark maintained a Buy rating on Permian Resources with a price target of $14, while Susquehanna upgraded the stock from Neutral to Positive, raising the price target from $17 to $20. Citi, on the other hand, reduced its price target from $18 to $17 but kept a Buy rating, noting the company’s strong operational performance despite the earnings miss. Analysts from Susquehanna praised the company for its improvements in capital efficiency and successful mergers and acquisitions. These developments reflect a mixed but generally optimistic view of Permian Resources’ potential in the current market environment.
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