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In a challenging market environment, Civitas Resources, Inc. (CIVI) stock has touched a 52-week low, reaching a price level of $46.18. According to InvestingPro analysis, the stock appears undervalued, trading at an attractive P/E ratio of 4.8x while offering a substantial 10.3% dividend yield. This downturn reflects a significant retreat from previous valuations, marking a stark contrast to the company's performance over the past year. Investors have witnessed a 1-year change in the stock price with a decrease of -32.88%, underscoring the volatility and the bearish sentiment that has gripped the energy sector, and Civitas Resources in particular. Despite the current downturn, analysts maintain optimistic price targets ranging from $60 to $84, suggesting potential upside. The company maintains a "GREAT" financial health score, with robust revenue growth of 59% in the last twelve months. This price movement has raised concerns among shareholders and sparked discussions about the company's future prospects and potential for recovery.
In other recent news, Civitas Resources has reported strong Q3 results, with an adjusted EBITDA of $910 million, credited to high sales volumes and effective cost management. The company returned $227 million to shareholders, primarily through share buybacks, and completed $104 million in buybacks in October. Civitas is planning to present its 2025 plan in February, with a focus on free cash flow and shareholder returns. The company expects 2024 capital expenditure guidance to be $195 million and is maintaining a cautious approach to mergers and acquisitions, prioritizing asset quality and scale. Two rigs in the DJ Basin and four in the Permian are planned for 2024, with flexibility based on free cash flow. The company has confirmed $130 million in gas price hedges through 2026. Civitas is committed to maintaining a competitive dividend yield and plans for a higher variable return of capital in Q4. These are recent developments in the company's strategy and financial performance.
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