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On Tuesday, Roth/MKM analysts upgraded Range Resources Corporation (NYSE:RRC) stock from Neutral to Buy, adjusting the price target upward to $42.00 from the previous $41.00. According to InvestingPro data, this target sits within the broader analyst range of $22.55 to $55, with the stock currently trading at $33.51. The upgrade comes amid a shift in the energy market dynamics, with a focus on natural gas producers over oil-centric firms.
The analysts at Roth/MKM believe that gas-focused exploration and production companies (E&Ps) present a more compelling investment opportunity in the near term. This assessment follows the recent announcement by OPEC+ on April 3, 2025, declaring their intention to ramp up production starting May 1.
In support of the upgrade, Roth/MKM analysts cited the competitive edge that natural gas companies may have, given the changing landscape in global energy production. The slight increase in the price target from $41 to $42 reflects a 2% enhancement and is based on a valuation multiple of 6.5 times the 2026 discounted cash flow, assuming a Henry Hub gas price of $3.75.
The analysts' commentary provided a clear rationale for their decision: "We are upgrading shares of RRC from Neutral to Buy as we think gas focused E&Ps are going to be more attractive than oil focused E&Ps in the near term given the announcement from OPEC+ on April 3 that the group plans to begin aggressively increasing production starting on May 1."
Range Resources Corporation, with its upgraded status and new price target, now reflects Roth/MKM's positive outlook on the natural gas sector in the face of impending OPEC+ production increases. The firm's analysis suggests a strategic positioning for Range Resources as the market anticipates the shift in production dynamics. With a market capitalization of $8.09 billion and EBITDA of $776.39 million, InvestingPro analysis indicates the stock is currently trading at fair value. Subscribers can access over 10 additional ProTips and a comprehensive Pro Research Report for deeper insights into RRC's financial health and market position.
In other recent news, Range Resources Corporation has announced a 12.5% increase in its quarterly dividend, raising it to $0.09 per share, which translates to an annualized dividend of $0.36. This decision reflects the company's commitment to delivering value to shareholders. Additionally, Morgan Stanley (NYSE:MS) has upgraded Range Resources' stock rating from Underweight to Equalweight, raising the price target to $49.00. This upgrade is attributed to the company's capital-efficient production growth strategy and stronger natural gas prices. Meanwhile, Moody's has upgraded Range Resources' Corporate Family Rating to Ba1, citing the company's solid operational performance and improved financial flexibility.
Mizuho (NYSE:MFG) Securities has adjusted its price target for Range Resources to $45.00 from $47.00 but maintains an Outperform rating. The firm's analysts have factored in broader industry developments and marketing advantages in their revised financial model. Benchmark analysts have maintained a Hold rating for Range Resources, forecasting an earnings per share of $0.92 for the first quarter, which surpasses consensus estimates. The analysts attribute this to favorable post-hedge gas realizations and gains from swaps. These developments highlight the company's strategic focus on financial stability and growth in the volatile energy market.
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