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On Wednesday, Stephens research firm revised its price target for Talos Energy (NYSE:TALO) shares, reducing it to $20.00 from the previous $21.00, while retaining an Overweight rating on the stock. The new target represents significant upside potential from the current price of $9.58. According to InvestingPro data, analyst targets range from $11 to $20, with a strong consensus recommendation of 1.64 (Buy). Stephens analysts based their decision on a detailed analysis of the company’s fourth-quarter production and financial projections.
The analysts expect Talos Energy’s fourth-quarter production to reach 97.9 thousand barrels of oil equivalent per day (MBoepd), which aligns with the market consensus. However, they anticipate the oil volumes to be slightly lower at 66.1 thousand barrels of oil per day (MBopd), which is 3% below the consensus. The Stephens team also provided forecasts for the company’s cash flow per share (CFPS), earnings before interest, taxes, depreciation, and amortization (EBITDA), and capital expenditures (capex) for the fourth quarter, projecting figures of $1.37, $310 million, and $163 million respectively, excluding plug and abandonment (P&A) costs. These estimates fall short of the consensus by 14%, 6%, and 8% respectively.
In their commentary, the analysts mentioned that they have adjusted their net asset value (NAV) per share and target price to reflect these latest estimates. They also highlighted that the upcoming fourth-quarter commentary from Talos Energy is likely to focus on the company’s plans for 2025, free cash flow (FCF) priorities, updates on the Katmai West resource, and the strategic direction under the leadership of a new CEO.
Investors and market watchers are advised to look out for Talos Energy’s fourth-quarter commentary for further insights into the company’s performance and strategic initiatives. The updated price target and maintained Overweight rating by Stephens reflect their current view on the stock’s potential performance.
In other recent news, Talos Energy has been the focus of various analyst reports and corporate announcements. Citi maintained a Buy rating on Talos Energy, highlighting the appointment of Paul Goodfellow as the new CEO and the firm’s efforts to reduce debt. Similarly, Benchmark kept their Buy rating, adjusting their fourth-quarter earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates for the company. JPMorgan raised their price target for Talos Energy following positive drilling results and updated financial projections.
In addition to these analyst updates, Talos Energy reported a significant oil and natural gas discovery at the Katmai West #2 well in the U.S. Gulf of Mexico. The well’s successful drilling outcome has nearly doubled the Proved estimated ultimate recovery (EUR) of the Katmai West field. Production from this well is expected to start in the late second quarter of 2025.
Furthermore, Talos Energy and its subsidiaries agreed to decrease their borrowing base and total commitments to $925 million, a move that reflects the company’s proactive management of its capital structure and liquidity. These recent developments provide investors with a clear picture of the ongoing activities and strategic direction of Talos Energy.
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