Piper Sandler Analyst Raises Price Target on Coterra Energy (CTRA) Amid Positive Q1 Performance

By Don Francis, Editor
May 15, 2024 7:08 AM UTC
Piper Sandler Analyst Raises Price Target on Coterra Energy (CTRA) Amid Positive Q1 Performance

Piper Sandler's Mark Lear raised their price target on Coterra Energy (NYSE: CTRA) by 5.4% from $37 to $39 on 2024/05/14. The analyst maintained their Strong Buy rating on the stock.

In a post-Q1 reporting season wrap-up, Lear noted that, overall, strong results from the Energy (Oil & Gas E&P) group were "somewhat offset by weaker crude pricing as Mideast ceasefire talks reversed the bulk of the geopolitical risk premium Piper Sandler had assumed heading into the prints."

For Q1 2024, Coterra Energy reported earnings per share (EPS) of $0.51, beating the Zacks Consensus Estimate of $0.41 but missing Q1 2023’s $0.87 by 41.4%. Revenue for the quarter came in at $1.43B, surpassing the Zacks Consensus Estimate of $1.38B but falling short of Q1 2023’s $1.78B by 19.4%.

The company's capital expenditure (capex) for Q1 2024 was $450M, with discretionary cash flow of $797M and free cash flow of $340M. Total equivalent production stood at 686 MBoepd, with oil production at 102.5 MBopd and natural gas production at 2,960 MMcfpd.

Looking ahead, Coterra Energy's management provided guidance for Q2 2024 and FY 2024. For Q2 2024, the company expects capex in the range of $470M to $550M, total equivalent production of 625 MBoepd to 655 MBoepd, oil production of 103 MBopd to 107 MBopd, and natural gas production of 2,600 MMcfpd to 2,700 MMcfpd. For FY 2024, Coterra Energy anticipates capex of $1.75B to $1.95B, discretionary cash flow of $3.1B, free cash flow of $1.3B, and oil production of 102 MBopd to 107 MBopd.

Chairman, President, & CEO Tom Jorden expressed satisfaction with Coterra Energy's operational and financial results, attributing them to the company's high-quality asset portfolio and top-tier operating team. Jorden emphasized the company's focus on oil and liquids-rich plays in the near term and its ability to adapt to a potential structural change in the natural gas market.

Alongside the rating update for Coterra Energy, Piper Sandler's Mark Lear made price target adjustments for other companies in their portfolio. The price target for Apa Corp was lowered by -5.7% from $35 to $33, while the price target for Northern Oil & Gas Inc was raised by 2.4% from $42 to $43. Chord Energy Corp saw a slight increase of 0.4% in its price target, from $230 to $231, and Devon Energy Corp had its price target raised by 1.7% from $60 to $61. Eog Resources Inc also had its price target raised by 0.7% from $153 to $154.

According to WallStreetZen, 84.6% of top-rated analysts currently rate CTRA as a Strong Buy or Buy, while 15.4% view it as a Hold. No analysts recommend or strongly recommend selling the stock. The consensus forecast among analysts is that CTRA's upcoming year will deliver EPS of $1.31, representing a 24.3% decline compared to the previous year.

Since Coterra Energy's latest quarterly report on 2024/05/02, the stock price has risen by 3.7%. Year-over-year, the stock is up 10.2%, although it is trailing behind the S&P 500, which has risen by 26.8% during the same period.

Piper Sandler analyst Mark Lear is ranked in the top 2% out of 4,585 Wall Street analysts by WallStreetZen. Lear specializes in the Consumer Cyclical and Energy sectors, with an average return of 12.4% and a 67.3% win rate.

Coterra Energy Inc. is an oil and gas exploration and production company with operations in the Permian Basin, Marcellus Shale, and the Anadarko Basin. Founded as a subsidiary of Cabot Corporation in 1989, the company is headquartered in Houston, TX.

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