Tuesday, Citi analysts updated their assessment of Liberty Oilfield Services (NYSE:LBRT), increasing the price target from $19.00 to $22.00 while retaining a Neutral stock rating. The revision follows a detailed analysis of the company's financial projections and growth potential into 2026.
According to InvestingPro data, LBRT has shown strong momentum with a 15.3% return over the past year and currently trades at a P/E ratio of 9.94x. The stock's RSI suggests it's in overbought territory, one of several key insights available through InvestingPro's comprehensive analysis tools.
In the report, Citi analysts adjusted their fourth-quarter EBITDA estimate for Liberty Oilfield Services downward by 3% to $166 million. This figure rises to $173 million when adding back stock compensation, compared to the consensus estimate of $174 million. For the first quarter, they anticipate an EBITDA of $176 million, or $183 million with stock compensation added back, which is slightly below the consensus projection of $190 million.
For context, InvestingPro shows the company's last twelve months EBITDA stands at $986 million, with the company maintaining a strong financial health score of 3.33 out of 5.
The analysts noted that Liberty Oilfield Services is integrating LPI into their core operations and provided explicit estimates for non-frac MW deployed. They expect this deployment to increase to 160 MW by the end of 2026, contributing $37 million of EBITDA in that year.
Despite the anticipated growth in power contribution, Citi has reduced its 2025 EBITDA estimate for the company by 4% to $765 million, or $793 million with stock compensation, which is below the consensus of $831 million. The forecast for 2026 sees a modest 1% reduction in EBITDA to $890 million, or $918 million with stock compensation, as opposed to the consensus estimate of $946 million.
The analysts' decision to lift the target price to $22 is based on a higher anticipated multiple of approximately 5 times, taking into account the company's growth potential leading into 2026. This new price target reflects Citi's analysis of the company's future financial health and market position.
In other recent news, Liberty Oilfield Services has been under the financial microscope with several firms adjusting their ratings and price targets. Goldman Sachs (NYSE:GS) maintained a neutral view on the company, recognizing the value in Liberty's share buyback program, which aims to repurchase approximately 4% of its market capitalization annually. Goldman Sachs set a price target of $19.00 for Liberty's shares.
Stifel maintained a buy rating for Liberty but reduced its price target from $26 to $25, citing disappointing Q4 guidance and pricing challenges. Similarly, RBC Capital Markets lowered its price target to $23 while maintaining an outperform rating due to lower than expected EBITDA and a less optimistic view of future fracking activity. Another noteworthy development came from Citi, which downgraded Liberty from Buy to Neutral, lowering its target price to $19 due to revised Q4 EBITDA estimates and less optimistic projections for 2025.
On the leadership front, Liberty Energy announced significant changes in its executive team following the nomination of Christopher A. Wright, the company's Founder, Chairman, Director, and CEO, for the position of U.S. Secretary of Energy. William Kimble has been appointed as the non-executive Chairman of the Board, and Ron Gusek has been named the new CEO.
In terms of earnings, Liberty reported strong Q3 results for 2024, with revenues reaching $1.1 billion and an adjusted EBITDA of $248 million. Despite market pressures, the company increased its quarterly cash dividend by 14% to $0.08 per share and spent $39 million on share repurchases. Looking ahead, Liberty executives project Q4 capital expenditures to be around $200 million and forecast 2025 capital expenditures at approximately $650 million.
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