On Monday, Gulfport Energy (OTC:GPORQ) Corporation (NYSE:GPOR) received an updated stock price target from Mizuho, increasing it to $166 from the previous $148 while retaining a Neutral rating on the stock. The adjustment comes after the firm updated its net asset value (NAV) model to reflect year-end 2023 reserves and the company's guidance for 2024.
Gulfport Energy has been adapting to lower gas prices by keeping production volumes steady, enhancing efficiency through longer lateral drilling, and concentrating on projects richer in liquids. The company's management has pledged to return any excess cash to shareholders through buybacks, barring any acquisition activities.
The energy company has also expanded its potential with the addition of approximately 50 to 60 new drilling locations in the Marcellus shale, which extends its total inventory to around 12 years. Despite these positive developments, the updated model from Mizuho only forecasts about a 9% upside to the new NAV of $166 per share.
In comparison, peers such as Chesapeake Energy (NYSE:CHK) and Range Resources (NYSE:RRC) are seen to have a more significant upside potential, with their inventories lasting 15 to 20 years, which may offer over 20% upside.
This contrast in inventory duration and upside potential is a contributing factor to Mizuho's decision to maintain a Neutral position on Gulfport Energy shares. The firm acknowledges the company's efforts and strategies but remains on the sidelines for the time being.
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