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On Tuesday, TD Cowen analyst David Deckelbaum upgraded Antero Resources (NYSE:AR) stock from Hold to Buy and increased the price target to $46.00 from the previous target of $40.00. According to InvestingPro data, the stock currently trades at $34.15, with analyst targets ranging from $23 to $63. Based on InvestingPro's Fair Value analysis, the stock appears fairly valued at current levels. The upgrade follows a positive shift in the outlook for natural gas, influenced by recent tariff announcements. Deckelbaum believes these changes in the energy sector will lead to a decrease in oil rig activity, which in turn is expected to reduce associated gas volumes. This reduction is anticipated to tighten the gas market balance by 2026 as demand continues to rise. The company's strong gross profit margin of 64% and revenue of $4.3 billion in the last twelve months demonstrate its operational efficiency in the current market environment.
Antero Resources' stock has experienced a decline of approximately 18% since the tariff announcements were made on April 2, 2025, with InvestingPro data showing a -16.54% return in the past week alone. Despite this recent downturn, Deckelbaum highlights Antero Resources' attractive financial prospects, pointing out the company's anticipated 12% free cash flow (FCF) yield in 2026. InvestingPro subscribers can access 8 additional analyst revisions and comprehensive financial health metrics that provide deeper insights into the company's prospects. This forecasted strong cash flow is a key factor in the analyst's decision to upgrade the stock rating.
The analyst's comments suggest a belief in the company's ability to benefit from the evolving gas market dynamics. The expected drop in oil rig counts and the subsequent decline in associated gas production could create a favorable environment for natural gas producers like Antero Resources. With a market capitalization of $10.6 billion and a beta of 3.09, investors should note the stock's higher volatility compared to the broader market.
Investors in Antero Resources have seen a notable decrease in share value since the beginning of April, but the revised outlook from TD Cowen indicates a potential turnaround for the company's financial performance. The new price target of $46.00 represents an increased level of confidence in the company's future growth and profitability.
The upgrade by TD Cowen reflects a broader optimism in the natural gas sector, with Antero Resources identified as a company well-positioned to capitalize on the expected market developments. The analyst's upgrade to a Buy rating suggests that, despite recent market challenges, Antero Resources may present a valuable opportunity for investors looking ahead to 2026. For a comprehensive analysis of Antero Resources' investment potential, including detailed financial metrics and expert insights, access the full Pro Research Report available exclusively on InvestingPro.
In other recent news, Antero Resources Corp reported a significant earnings surprise for Q4 2024, with earnings per share (EPS) of $0.48, surpassing analyst expectations of $0.31. Despite a slight revenue miss, with reported revenue at $1.17 billion, the company projects over $1.6 billion in free cash flow for 2025. Meanwhile, JPMorgan analyst Arun Jayaram raised the price target for Antero Resources stock to $48, citing a positive outlook for the U.S. natural gas sector. Jayaram projects Antero Resources' first-quarter earnings per share (EPS) and cash flow per share (CFPS) at $0.87 and $1.73, respectively, which is higher than the Street's estimates.
Benchmark analysts maintained a Hold rating on Antero Resources stock, aligning their first-quarter EPS and EBITDA estimates closely with the market consensus. On the credit side, Antero Midstream (NYSE:AM) Partners LP saw an upgrade in its stand-alone credit profile to 'bb+' from 'bb' by S&P Global Ratings. The rating agency confirmed its 'BB+' long-term issuer credit and debt ratings, supported by sustained deleveraging and improved credit metrics. These developments indicate a stable outlook for both Antero Resources and Antero Midstream, with ongoing financial strategies focused on debt reduction and operational efficiency.
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