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Investing.com - Raymond James lowered its price target on TXO Energy Partners (NYSE:TXO) to $22.00 from $24.00 on Tuesday, while maintaining a Strong Buy rating following the company’s second-quarter results. The stock, currently trading at $13.40 and near its 52-week low, appears undervalued according to InvestingPro analysis.
The firm noted that TXO’s second-quarter distribution of $0.45 per unit exceeded both Raymond James and Street expectations by approximately 8% and 15% respectively. The company maintains an impressive dividend yield of ~13.4%, making it one of the highest-yielding stocks in its sector.
TXO closed its previously announced acquisition of White Rock Energy on July 31 for cash consideration of $338.6 million, subsequently raising its 2025 capital expenditure guidance from $30-50 million to approximately $65 million, which aligned with market expectations.
Raymond James forecasts third-quarter production of approximately 29 Mboe/d and capital expenditure of about $22.4 million, projecting a third-quarter distribution of $0.30 per unit, slightly below Street estimates of $0.33.
The firm expects TXO to maintain one of the highest distribution yields in the sector due to its low shallow base decline rate of approximately 10%, with its active hedging program supporting stable distributable cash flow as the company remains committed to returning 100% of available cash to unitholders.
In other recent news, TXO Energy Partners has been the focus of analyst attention, with several firms adjusting their price targets for the company. Stifel has raised its price target for TXO Energy Partners to $21.00 from $20.00, maintaining a Buy rating. This adjustment comes after TXO’s second-quarter 2025 results, with expectations that the White Rock acquisition will offer additional drilling opportunities and lower production costs. Similarly, Raymond James has increased its price target for TXO Energy Partners to $24.00 from $23.00, while keeping a Strong Buy rating. The firm anticipates TXO will exceed production expectations for the second quarter, forecasting approximately 25.8 Mboe/d against a consensus estimate of 25.2 Mboe/d. Raymond James also projects quarterly capital expenditures to be around $9 million, slightly below the Street’s expectations of $9.5 million. These recent developments highlight the positive outlook analysts have for TXO Energy Partners following its strategic moves and operational performance.
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