On Wednesday, Mizuho (NYSE:MFG) Securities reiterated its positive stance on shares of Expand Energy (NASDAQ:EXE) shares, maintaining an Outperform rating with a price target of $128.00. The stock, currently trading at $104.12, sits near its 52-week high of $105, reflecting strong momentum.
According to InvestingPro data, the company maintains a favorable analyst consensus rating of 1.75. The firm's analysts anticipate that Expand Energy will slightly surpass market expectations for its fourth-quarter 2024 EBITDA, with both production volumes and pricing forecasted to edge ahead of consensus estimates.
The upcoming earnings call, scheduled for February 25, is expected to shed light on the company's projections for 2025 and the subsequent years. Expand Energy has already provided a preliminary outlook for 2025, highlighting the benefits of capital efficiencies stemming from delayed well completions and synergies from its recent acquisition of Southwestern Energy (NYSE:SWN).
With an impressive EBITDA of $1.66 billion and a market capitalization of $24.06 billion, the company has demonstrated significant scale. Analysts are keen to understand the company's response to the increasing demand for shale gas, given the improving natural gas market conditions.
Management at Expand Energy has underscored their strategy to grow the company's marketing and trading operations, aiming to enhance the value received for their natural gas production. Mizuho views this move as a strategic advantage that could differentiate Expand Energy in the competitive energy sector.
The affirmation of the $128.00 price target is based on the firm's net asset value (NAV) calculations, which consider the company's assets and potential earnings. Expand Energy's focus on capital efficiency and strategic growth initiatives appears to position it favorably in the eyes of Mizuho analysts as the energy market evolves.
InvestingPro analysis suggests the stock is slightly overvalued at current levels, though 7 analysts have recently revised their earnings expectations upward. Discover more insights and 12 additional ProTips with an InvestingPro subscription.
In other recent news, Expand Energy has reported several significant developments. The company recently completed a merger with Southwestern Energy, a major move in the energy sector. Moreover, the company successfully secured $750 million in senior notes due in 2035.
Analyst firms such as UBS, RBC Capital Markets, Citi, Mizuho Securities USA, and Stephens have all adjusted their ratings and price targets for Expand Energy, reflecting the company's strategic position and operational planning.
Expand Energy's third-quarter earnings report showed an adjusted cash flow of approximately $337 million, aligning with consensus estimates. The company has also provided preliminary guidance for fiscal year 2025, projecting average production around 7.0 billion cubic feet equivalent per day and capital expenditures estimated at $2.7 billion.
The company has also introduced a new cash return framework aiming to balance debt reduction and cash returns to shareholders while preserving the current base dividend yield of around 4.2%. Following a recent deal, Expand Energy has increased its target for anticipated synergies by about 25% to $500 million. These are among the recent developments that investors should consider when evaluating Expand Energy.
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