China smartphone shipments slumped in June on inventory overhang: Jefferies
On Tuesday, Gulfport Energy (OTC:GPORQ) Corporation (NYSE: GPOR), currently trading at $165.48 with a market capitalization of $2.96 billion, received a Buy rating from UBS, accompanied by a price target of $215. The new coverage by the investment firm highlights a favorable risk-reward scenario for the energy company, noting its year-to-date underperformance compared to peers. According to InvestingPro data, the stock maintains a strong Buy consensus among analysts, with targets ranging from $193 to $257. The analyst at UBS pointed out that Gulfport Energy’s stock has lagged behind its counterparts by approximately 10% since the beginning of the year.
The UBS analyst underscored the attractiveness of Gulfport Energy’s shares, citing a significant discount in its 2025 estimated free cash flow (FCF) yield compared to the average of gas exploration and production companies. Gulfport’s FCF yield is projected at around 14%, which is notably higher than the industry average of 8%. This discrepancy is seen as a reflection of concerns regarding the depth of the company’s inventory. InvestingPro analysis reveals several positive indicators, including expected net income growth and sales growth for the current year, with six analysts recently revising their earnings estimates upward.
Gulfport Energy has outlined plans to return almost all of its fiscal year 2025 FCF to shareholders. This commitment is anticipated to yield a return on capital (RoC) of approximately 15% for 2025, which is more than double the average RoC yield of its peers, estimated at 7%. The strategy to enhance shareholder value includes increasing share buybacks through the second half of 2025 and boosting margins and FCF into 2026 by intensifying liquids drilling.
The UBS analysis suggests that these measures will likely reduce the valuation gap between Gulfport Energy and its peers. According to UBS, on the basis of their price target multiple, Gulfport Energy’s stock is currently pricing in a 2026 estimated EBITDA that is more than 20% below UBS’s own estimates, indicating potential undervaluation. This assessment by UBS sets a positive outlook for Gulfport Energy’s financial performance and stock valuation in the coming years. With the next earnings report due on May 6, investors can access comprehensive analysis and additional insights through InvestingPro’s detailed research reports, which cover over 1,400 US stocks including GPOR.
In other recent news, Gulfport Energy’s fourth-quarter 2024 earnings report revealed a mixed performance, with earnings per share (EPS) of $4.74 surpassing the forecasted $4.32, but revenue falling short at $239.87 million compared to the expected $334.06 million. Evercore ISI has updated its financial outlook for Gulfport Energy, raising the price target to $190 from $170 and maintaining an In Line rating, citing recent commodity prices and strategic company discussions. Meanwhile, JPMorgan has slightly lowered its price target for Gulfport Energy to $210 from $211, maintaining an Overweight rating due to anticipated lower production and capital expenditure forecasts. BofA Securities also adjusted its price target to $224 from $227, reaffirming a Buy rating based on Gulfport’s strong cash flow outlook and potential share repurchases. TD Cowen increased the price target to $187 from $185, maintaining a Hold rating, noting Gulfport’s underperformance compared to natural gas peers despite positive yield potential. Gulfport Energy plans to maintain flat total production while increasing liquids production by 30% in 2025, with a capital spend projected between $370 million and $395 million. The company aims to return a significant portion of its adjusted free cash flow through stock repurchases, demonstrating confidence in its cash generation capabilities.
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