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Friday - TD Cowen has initiated coverage on Gulfport Energy (NYSE:GPOR) stock, assigning a Hold rating with a price target of $185.00. Currently trading at $184.09, the stock has demonstrated impressive momentum with a 45% return over the past year. Gulfport Energy’s operations continue to perform robustly under the guidance of its new leadership, maintaining profitability with a healthy 55% gross margin. The company’s assets in the low-cost Utica dry gas region have been a strong point, but the focus is shifting towards the company’s strategy for 2025, which is expected to include a transition to liquids. According to InvestingPro, analyst targets range from $170 to $263, suggesting potential upside.
The Lake VII pad and third-party offsets have shown promising results, which has caught the attention of industry observers. With an EV/EBITDA ratio of 5.4x and a P/E ratio of 15.2x, TD Cowen’s analyst believes that there is a potential for attractive yield upside. However, the current long-term natural gas price of $3.50 suggests that the stock is fairly valued at present, aligning with InvestingPro’s Fair Value assessment.
The analyst’s price target is based on a net asset value per share (NAV) calculation. This method of valuation considers the value of the company’s assets minus liabilities, divided by the number of shares outstanding. The $185.00 price target implies a certain level of investor return based on these underlying asset values. InvestingPro’s comprehensive analysis reveals a "GOOD" overall Financial Health score, with particularly strong ratings in profitability and price momentum metrics.
In the report, the analyst highlights the strategic moves Gulfport Energy is making, particularly the expected shift in focus towards liquid-rich plays. This shift is anticipated to be a key driver for the company’s future growth and performance, though InvestingPro data indicates analysts expect sales decline in the current year. For deeper insights into Gulfport Energy’s financial health and growth prospects, access the full Pro Research Report, available exclusively to InvestingPro subscribers.
The Hold rating indicates that TD Cowen’s analyst does not currently see Gulfport Energy stock as undervalued or overvalued, but rather appropriately priced given the current market conditions and company fundamentals. With five analysts recently revising earnings downward for the upcoming period, investors may interpret this rating as a signal to maintain their current investment position in the stock until further opportunities or changes in the company’s performance arise. Discover 10+ additional exclusive ProTips and comprehensive financial metrics by subscribing to InvestingPro.
In other recent news, Gulfport Energy’s financial performance and strategic growth have seen significant developments. The company’s third-quarter report showcased a substantial oil output increase, driven by a strong performance in the Utica condensate window. This was accompanied by a positive cash flow beat and a 4% reduction in the forecasted capital expenditures for fiscal year 2024. Gulfport Energy also increased its share buyback authorization to $1 billion, reiterating its commitment to return a substantial portion of its free cash flow to shareholders.
In terms of analyst notes, BofA Securities upgraded Gulfport Energy shares from Neutral to Buy and increased the price target to $227. KeyBanc Capital Markets raised its price target on Gulfport Energy to $205, maintaining an Overweight rating, while JPMorgan trimmed its price target to $173, also maintaining an Overweight rating.
Gulfport Energy has also entered into an agreement to repurchase 79,410 shares at a 2.25% discount, reflecting management’s confidence in Gulfport’s value proposition. This move is part of the company’s ongoing $1 billion common share repurchase program. These recent developments highlight Gulfport Energy’s strong financial health and commitment to strategic growth, particularly in high-margin liquids production.
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