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Investing.com - Benchmark has reiterated its Buy rating on Talos Energy (NYSE:TALO) with a price target of $20.00. The target represents a significant upside from the current price of $9.06, and according to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.
Benchmark reduced its second-quarter EBITDA forecast for Talos Energy to $270 million from $282 million, citing market-to-market commodities/differentials and a 2% reduction in volumes. The current consensus estimate stands at $269 million.
The firm expects to hear updates on Talos Energy’s progress toward its $100 million cost savings goal during the upcoming earnings report. Results from the company’s Daenerys project are anticipated in late September.
Benchmark projects approximately $50 million of free cash flow for Talos Energy this quarter, which would add to the company’s existing $133 million working capital surplus.
The reaffirmed Buy rating comes as Talos Energy continues to focus on operational efficiency and capital discipline in its Gulf of Mexico and Gulf Coast operations, maintaining a healthy current ratio of 1.05 and demonstrating strong operational margins with a gross profit margin of 72.8%.
In other recent news, Talos Energy is preparing to release its upcoming earnings report, with Mizuho (NYSE:MFG) maintaining an Outperform rating and a price target of $11.00. The firm anticipates that Talos will meet consensus estimates, with lower production and pricing balanced by reduced capital expenditures. Meanwhile, Talos Energy has announced a corporate strategy focused on offshore exploration and production, as outlined by CEO Paul Goodfellow. Despite KeyBanc’s observation that the strategy update largely mirrors the company’s legacy approach, it maintained an Overweight rating with a $12.00 price target.
In executive developments, Gregory M. Babcock has been appointed Interim Chief Financial Officer following the resignation of Sergio L. Maiworm Jr. Babcock, who will continue his role as Vice President and Chief Accounting Officer, will receive a supplemental payment for his interim position. This payment is retroactive to May 1, 2025, and will continue through July 31, 2025, with extensions for each subsequent month he serves. The transition follows Maiworm’s decision to pursue a new opportunity, with Babcock bringing extensive experience from his tenure at Talos Energy and previous roles at Deloitte & Touche.
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