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On Monday, Raymond (NSE:RYMD) James initiated coverage on Expand Energy (NASDAQ:EXE), awarding the company a Strong Buy rating and setting a price target of $135.00. According to InvestingPro data, this target represents significant upside from the current price of $102.87, with analyst targets ranging from $86 to $146. The stock has shown strong momentum, gaining over 42% in the past six months. Expand Energy, now the largest U.S. natural gas producer following the Chesapeake/Southwestern merger, operates primarily in the Haynesville basin in Louisiana and the Marcellus basin in Appalachia. The firm’s analyst highlighted Expand Energy’s potential for capital-efficient growth due to its significant investment in drilled but uncompleted wells (DUCs) and deferred turn in-lines (TILs) during recent low-price periods.
Expand Energy, with its headquarters in Oklahoma City and a market capitalization of $23.71 billion, holds a robust portfolio that promises multiple decades of viable inventory and a leading growth in free cash flow among its peers. InvestingPro analysis reveals the company maintains a healthy financial position with a current ratio of 2.0, indicating strong liquidity to support its growth plans. The analyst from Raymond James pointed out that the company’s extensive investments have positioned it to rapidly increase production in response to growing demand. This demand is anticipated to rise from a surge in LNG exports and power requirements stemming from trends such as AI/data centers, electric vehicles, and broader electrification.
The company’s backlog of approximately 80 deferred TILs and around 60 DUCs is expected to facilitate a production increase to over 7 billion cubic feet equivalent per day (Bcfe/d) in 2025. According to Raymond James’ gas price forecast, Expand Energy’s free cash flow yield is projected to be second only to AR among its gassy peers in 2026, with anticipated prices of $4.00 in 2025 and $4.50 in 2026.
The valuation of Expand Energy also appears favorable in comparison to its peers, trading at 5.6 times its estimated 2025 enterprise value to EBITDA and 4.8 times for 2026, against the peer group averages of approximately 7 times and 6.5 times, respectively. While the current P/E ratio stands at 53.44, InvestingPro subscribers can access 14 additional key valuation metrics and insights to make more informed investment decisions. The company’s overall financial health score is rated as FAIR, with particularly strong momentum and cash flow metrics.
In other recent news, Expand Energy’s earnings and revenue results have been a focal point for multiple analyst firms. Goldman Sachs reinstated coverage on the company with a Buy rating, following the successful merger of Expand Energy with Chesapeake Energy (NYSE:CHK) and Southwestern Energy (NYSE:SWN). The firm set a 12-month price target of $121, citing the company’s focus on capital efficiency improvements and volatility mitigation.
Piper Sandler initiated coverage with a Neutral rating and a price target of $96.00, highlighting the company’s strategic geographic advantage and leading position in asset productivity. TD Cowen also started coverage, setting a price target of $108.00, recognizing the company’s status as the largest natural gas producer in the United States.
JPMorgan assigned an Overweight rating and a price target of $112.00, pointing to the company’s strategic position in the Haynesville and Appalachia basins. Citi analysts increased the price target to $125 from the previous $115 while maintaining a Buy rating, following a revision of the company’s earnings model, which now anticipates a discretionary cash flow of approximately $802.3 million.
These are recent developments that give investors insights into the performance and prospects of Expand Energy.
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