On Monday, Jefferies maintained their Hold rating on shares of Range Resources (NYSE:RRC) but increased the price target to $35.00, up from the previous $34.00.
The firm anticipates Range Resources to report second-quarter 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) and cash flow per share (CFPS) of $261 million and $0.93 respectively, which is closely aligned with consensus estimates of $267 million and $0.93.
The forecasted free cash flow (FCF) for the quarter is estimated at $50 million, bolstered by a strong hedging profile expected to yield approximately $137 million in hedging gains. Moreover, favorable pricing for natural gas liquids (NGLs) is also contributing to the company's positive financial outlook.
Jefferies points out that the focus for Range Resources is likely to remain on the allocation of free cash flow, particularly towards share repurchases, which are projected at $75 million for the year 2024. The company's guidance for the remainder of 2024 and initial insights for 2025, along with progress on operational efficiencies, are also noted as areas of interest for investors.
The updated stock price target of $35 reflects a mark-to-market adjustment by Jefferies, reinforcing their Hold stance on the stock. The firm's outlook suggests a steady performance for Range Resources, underpinned by strategic financial management and favorable market conditions for its products.
In other recent news, Range Resources Corporation (NYSE:RRC) has seen several adjustments from different analyst firms. JPMorgan (NYSE:JPM) has increased its price target for the company to $37.00, maintaining its Underweight rating.
The firm's second-quarter production projection for the company stands at 2.12 billion cubic feet equivalent per day (Bcfe/d) at a capital expenditure of $181 million. The firm also forecasts earnings per share (EPS) and cash flow per share (CFPS) of $0.33 and $0.89, respectively, for the second quarter of 2024.
Jefferies has updated its financial model for Range Resources, raising its stock price target to $34.00 based on a higher expected realization from natural gas liquids (NGLs) and an anticipated shift in the company's liquids mix. Piper Sandler increased its price target for Range Resources to $43.00, following better-than-expected first-quarter earnings due to a favorable liquids mix and improved NGL pricing.
Mizuho Securities raised its price target to $41, acknowledging Range Resources' solid execution and potential to generate significant free cash flow in 2024. RBC Capital Markets, however, downgraded the stock from Outperform to Sector Perform while increasing the price target to $39, citing a weak natural gas market and a downward revision in their natural gas price outlook.
These recent developments reflect the company's strategic positioning and operational efficiency in the current commodity environment. It's important to note that these are only projections and actual results may vary.
InvestingPro Insights
As Range Resources (NYSE:RRC) navigates through the financial year with Jefferies' adjusted price target in sight, real-time metrics from InvestingPro provide a deeper look into the company's market position.
With a current market capitalization of approximately $8.18 billion and a price-to-earnings (P/E) ratio standing at 17, investors can gauge the company's valuation in relation to its earnings. Adjusting for the last twelve months as of Q1 2024, the P/E ratio tightens slightly to 14.64, suggesting a more attractive valuation for prospective investors.
InvestingPro Tips highlight Range Resources' recent profitability and the anticipation of continued profitability this year, which aligns with the positive outlook from Jefferies. Moreover, with a strong return over the last five years and moderate levels of debt, the company stands on solid ground for future growth.
Still, investors should be mindful of the stock's high revenue valuation multiple and the reported significant revenue decline over the last twelve months as of Q1 2024, which contrasts with the company's profitability indicators.
For those looking to delve further into Range Resources' financials and market prospects, additional InvestingPro Tips are available at https://www.investing.com/pro/RRC. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, offering more exclusive insights to inform your investment decisions. There are 6 additional InvestingPro Tips awaiting those who seek a comprehensive understanding of Range Resources' potential.
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