Permian Resources Exceeds Expectations, Analyst Raises Price Target

Mizuho's Nitin Kumar raised their price target on Permian Resources (NYSE: PR) by 5% from $20 to $21 on 2024/05/08. The analyst maintained their Strong Buy rating on the stock.

Permian Resources, an independent oil and natural gas company focusing on the development of unconventional oil reserves, reported its Q1 2024 earnings on May 7th. The company exceeded expectations with impressive financial results and provided optimistic guidance for the rest of the year.

For the first quarter of 2024, Permian Resources reported earnings per share (EPS) of $0.42, surpassing the Zacks Consensus Estimate of $0.36. This also represented a significant increase of 23.5% compared to the EPS of $0.34 in the first quarter of 2023. The company's revenue stood at $1.24 billion, beating the Zacks Consensus Estimate by 6.39% and showing a remarkable growth of 101.2% compared to the same period last year when revenue was $616.27 million.

Shareholders were also pleased to hear that Permian Resources returned $185 million in the form of a quarterly base dividend of $0.06, a variable dividend of $0.14, and the repurchase of 2 million shares for $31 million. These actions demonstrate the company's commitment to providing value to its investors.

Looking ahead, Permian Resources management provided positive guidance for FY 2024. They expect standalone oil and total production targets of 148-152 MBbls/d and 310-330 MBoe/d, respectively, based on the mid-point of guidance, which represents a 2% increase from previous guidance. Additionally, recent acquisitions are expected to contribute 3,500 Boe/d of total production in the second half of 2024. The company also plans to invest an incremental $50 million in wells spud on newly acquired acreage in the same period.

Co-CEO Will Hickey expressed satisfaction with the company's performance, stating, "In our first full quarter post-closing Earthstone, Permian Resources delivered strong operational and financial results, building upon our operational momentum from last year." Co-CEO James Walter added, "This quarter’s strong results allowed us to generate $324 million of adjusted free cash flow, or $0.42 per share."

Analysts have taken note of Permian Resources' positive outlook. Nitin Kumar, an analyst ranked in the top 1% out of 4,577 Wall Street analysts by WallStreetZen, raised the price target on PR by 5%, from $20 to $21. Kumar specializes in the Real Estate and Energy sectors and has an impressive average return of 14.6% and a win rate of 62.8%.

The consensus forecast among analysts is that Permian Resources will deliver earnings per share (EPS) of $2.03 in the upcoming year. If these predictions hold true, the company's next yearly EPS will witness a significant increase of 57.3% on a year-over-year basis.

Since Permian Resources' latest quarterly report, the stock price has experienced a slight decline of 1.6%. However, on a year-over-year basis, the stock has surged by an impressive 69.5%. This outperforms the S&P 500, which has seen a growth of 25.4% during the same period. These figures indicate the market's positive response to Permian Resources' strong financial performance and optimistic outlook.

Permian Resources is not the only company drawing attention from analysts. On May 8th, the same analyst, Nitin Kumar, raised their price target on Occidental Petroleum Corp by 1.4%, from $70 to $71, and maintained their Hold rating.

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