Silverbow Resources' Price Target Raised 4.7% by Mizuho Analyst

By Don Francis, Editor
May 14, 2024 9:25 AM UTC
Silverbow Resources' Price Target Raised 4.7% by Mizuho Analyst

Mizuho's William Janela raised their price target on Silverbow Resources (NYSE: SBOW) by 4.7% from $43 to $45 on 2024/05/13. The analyst maintained their Strong Buy rating on the stock.

Janela's price target move came in a post-reporting season review of names in their Energy (Gas & Oil E&P) portfolio. Mizuho updated its commodity price forecast through 2026, as well as increasing net asset value-based price targets by 7%, the analyst told readers. Their firm sees strength in global oil prices in the near term because of higher non-OECD demand and more modest supply gains but is maintaining a $75 per barrel midcycle Brent outlook long term, Janela detailed.

For Q1 2024, Silverbow Resources reported EPS of $2.09, which beat the Zacks Consensus Estimate of $1.84 and, by 120%, Q1 2023's $0.95. The company also reported revenue of $256.68M, which missed the Zacks Consensus Estimate by 5.73% but beat, by 83.4%, Q1 2023's $139.95M.

Management of Silverbow Resources enhanced their FY 2024 guidance, raising production, free cash flow, and debt reduction expectations. The production estimate was raised by 5% to a midpoint of 94 MBoe/d, with oil/liquids representing 48% of volumes. The free cash flow estimate was increased by $50M, or 36%, to a midpoint of $188M. The company also announced further optimization of planned 2024 investments, allocating 85% of capital to higher-return oil and liquids developments. The capex remained unchanged at $470M to $510M. Silverbow Resources lowered its expected year-end leverage ratio to approximately 1.25x on accelerated debt paydown and expects to attain a long-term target of less than 1.0x in 2025.

CEO Sean Woolverton expressed satisfaction with the company's Q1 results, stating, "Our Q1 results were outstanding and are an indicator of the trajectory of our business. With the successful integration of our South Texas acquisition, we have greater scale, capital flexibility, product diversity, and cash flow generation. Consistent with our stated strategy, we are staying disciplined on returns and demonstrating accelerated debt paydown as we march towards our long-term leverage ratio target of less than 1.0x. Strong performance during this quarter supports an increase to our FY 2024 outlook for production and free cash flow. We are clearly demonstrating our recent transaction is highly accretive to the business and accelerates delivery of our stated strategy to create further value for all shareholders."

In addition to the rating upgrade on Silverbow Resources, Janela made several changes to other names in their portfolio. They raised the price target on Apa Corp by 6.3%, from $32 to $34, and maintained their Sell rating. The price target for Murphy Oil Corp was raised by 7.3%, from $55 to $59, with a Strong Buy rating. Crescent Energy Co saw a price target increase of 7.7%, from $13 to $14, with a Hold rating. Magnolia Oil & Gas Corp also received a price target increase of 7.7%, from $26 to $28, with a Hold rating. Lastly, Vital Energy Inc had its price target raised by 7.3%, from $55 to $59, with a Hold rating.

According to the data, 80% of top-rated analysts currently rate SBOW as a Strong Buy or Buy, while 20% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

Since SBOW's latest quarterly report on 2024/05/01, the stock price has risen by 11.2%. Year-over-year, the stock is up 34.3%. During that period, SBOW has outpaced the S&P 500, which is up 26.2%.

Mizuho analyst William Janela is ranked by WallStreetZen in the top 7% out of 4,581 Wall Street analysts, with an average return of 28.9% and a 50.8% win rate. They specialize in the Energy sector.

SilverBow Resources (formerly Swift Energy Co.) is an oil and natural gas exploration and production company with assets in Eagle Ford and Austin Chalk (South Texas). The company's operations are focused in six fields: Artesia, AWP, Fasken, Eastern Eagle Food, and Southern Eagle Ford Gas. As of 2021/12/31, it had proved reserves of 1,416 billion cubic feet of natural gas equivalent. SilverBow Resources was founded in 1979 and is headquartered in Houston, TX.

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