On Wednesday, an analyst from Wells Fargo (NYSE:WFC) adjusted the financial outlook for Permian Resources Corp (NASDAQ: NYSE:PR) shares, resulting in a raised price target for the company. The new target is set at $21.00, up from the previous $18.00, while the stock's Overweight rating remains unchanged.
The revision in the price target reflects the analyst's updated projections for the first quarter and full year of 2024. These adjustments take into account the latest data on production volumes, operating costs, and price realization. Notably, the analyst forecasts an increase in gas production and a decrease in operating expenses for the first quarter, which are slightly counterbalanced by a dip in gas prices.
For the first quarter of 2024, the analyst predicts adjusted EBITDA to be $872 million, with earnings per share (EPS) at $0.38, free cash flow (FCF) at $277 million, and capital expenditures (Capex) at $511 million.
These figures are closely aligned with wider market expectations, which currently stand at an adjusted EBITDA of $878 million, EPS at $0.37, FCF at $276 million, and Capex at $529 million.
Looking ahead to the full year, the Wells Fargo analyst anticipates strong free cash flow generation for Permian Resources. Based on the firm's price deck, which assumes an average West Texas Intermediate (WTI) crude oil price of $75.71 per barrel for 2024, the company is projected to generate $1.22 billion in free cash flow for the year. This outlook underscores a positive financial trajectory for Permian Resources, as indicated by the increased price target for its shares.
InvestingPro Insights
In light of the recent analyst update from Wells Fargo on Permian Resources Corp (NASDAQ: PR), InvestingPro data further enriches the financial narrative of the company. With a market capitalization of $13.58 billion and a trailing twelve-month revenue growth of an impressive 46.43%, Permian Resources demonstrates robust financial health. The company also boasts a strong gross profit margin of 77.45% over the last twelve months as of Q4 2023, indicating efficient operations and cost management.
Two InvestingPro Tips that align with the article's sentiment include the anticipation of sales growth in the current year and the fact that 7 analysts have revised their earnings upwards for the upcoming period. These insights suggest that the market holds a positive outlook on Permian Resources' financial performance, which may be a factor in the analyst's raised price target. Additionally, the stock's price is trading near its 52-week high, at 98.4% of the peak, which could signal investor confidence in the company's prospects.
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