Mizuho Analyst Bullish on Civitas Resources, Raises Price Target by 8.9%

By Don Francis, Editor
May 16, 2024 7:49 AM UTC
Mizuho Analyst Bullish on Civitas Resources, Raises Price Target by 8.9%

Mizuho's William Janela raised their price target on Civitas Resources (NYSE: CIVI) by 8.9% from $90 to $98 on 2024/05/13. The analyst maintained their Strong Buy rating on the stock.

In a recent note on names in their Energy (Oil & Gas E&P) portfolio, Janela explained that the increase in price target was driven by Mizuho's updated commodity price forecast through 2026. The new forecast resulted in a 7% increase in net asset value-based price targets. Janela's firm is optimistic about near-term strength in global oil prices due to higher non-OECD demand and more modest supply gains. However, they maintained their long-term outlook of $75 per barrel for midcycle Brent.

Civitas Resources, an oil and natural gas exploration and production company focused in the Rocky Mountain region, recently reported its financial results for Q4 2023 and FY 2023. In Q4 2023, the company reported earnings per share (EPS) of $3.20, beating the Zacks Consensus Estimate of $2.92. However, it fell short of Q4 2022's EPS of $3.29 by 2.7%. Revenue for the quarter came in at $1.127 billion, surpassing Q4 2022's revenue of $814.27 million by an impressive 38.4%. However, it missed the Zacks Consensus Estimate by 6.35%.

For the full fiscal year 2023, Civitas Resources reported EPS of $9.02, a 61.6% decrease from FY 2022's EPS of $14.58. The company's revenue for FY 2023 was $3.4 billion, down 10.5% from FY 2022's $3.8 billion. Despite these results, CEO Chris Doyle remains optimistic about the company's future. He highlighted the success of Civitas' DJ Basin asset and their strategic expansion in the Permian Basin, which provides them with important scale and diversification. Doyle emphasized the company's focus on maximizing free cash flow, returning cash to shareholders, and maintaining a strong balance sheet.

Apart from the rating update on Civitas Resources, Mizuho's William Janela also made changes to price targets of other stocks in their portfolio. They raised the price target on Apa Corp by 6.3%, Murphy Oil Corp by 7.3%, Crescent Energy Co by 7.7%, Magnolia Oil & Gas Corp by 7.7%, and Vital Energy Inc by 7.3%. The analyst maintained their respective ratings for these stocks.

Currently, 100% of top-rated analysts rate Civitas Resources as a Strong Buy or Buy, with no analysts holding a Hold rating or recommending selling the stock.

Since Civitas Resources' latest quarterly report on May 2, 2024, the stock price has increased by 8.4%. Year-over-year, the stock has gained 13.6%. However, during this period, Civitas Resources underperformed the S&P 500, which recorded a 28.3% increase.

Mizuho analyst William Janela is ranked in the top 7% of Wall Street analysts by WallStreetZen. With an average return of 28.8% and a win rate of 52.5%, Janela specializes in the Energy sector.

Civitas Resources, Inc., founded in 1999 and based in Denver, Colorado, is focused on oil and natural gas exploration and production in the Rocky Mountain region, primarily the Wattenberg Field of the Denver-Julesburg Basin.

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