Stephens, a financial services firm, has increased its price target on shares of Matador Resources Company (NYSE: NYSE:MTDR) to $78.00, up from the previous $76.00.
The firm maintained its Overweight rating on the stock. The adjustment comes as Stephens' analyst provided insights into the company's third-quarter performance and future prospects.
According to the analyst, the updated third-quarter cash flow per share (CFPS), production, and capital expenditure estimates are 4% below, 1% below, and 4% above consensus, respectively. The analyst noted that Matador's third-quarter production estimate is slightly above the midpoint of the company's guidance. This observation is based on Matador's historical trend of surpassing its projections.
The analyst also highlighted that the consensus might shift downwards as other analysts revise their realized natural gas price estimates. In light of these adjustments, Stephens has tweaked its net asset value (NAV) per share and consequently the target price for Matador Resources.
The upcoming third-quarter conference call is anticipated to cover a range of topics. These include declining well costs, free cash flow (FCF) priorities, the integration of the Ameredev II acquisition, the state of Permian natural gas markets, and management's outlook for the year 2025.
In other recent news, Matador Resources Company has been the center of several significant developments. The company's financial growth and operational outlook were underscored by a 25% increase in its quarterly cash dividend, from $0.20 to $0.25 per share.
Truist Securities maintains a positive stance on Matador, reaffirming a Buy rating with a $75.00 price target, based on expectations of record production for the third quarter of 2024. In contrast, KeyBanc has lowered its price target to $72.00 from $76.00, while maintaining an Overweight rating, following the acquisition of Ameredev.
Furthermore, Matador has completed a private offering of $750 million in 6.25% senior unsecured notes due in 2033, primarily aimed at repaying existing debt. JPMorgan (NYSE:JPM) and Stephens have responded positively to these developments, raising their price targets for Matador to $79.00 and $76.00, respectively.
Lastly, Matador is constructing a cryogenic gas processing facility at the Marlan plant, expected to be operational in the first half of next year, and has welcomed Susan Ward to its board.
InvestingPro Insights
To complement Stephens' analysis of Matador Resources Company (NYSE:MTDR), recent data from InvestingPro offers additional context. The company's market capitalization stands at $6.43 billion, with a P/E ratio of 6.62, indicating a potentially undervalued stock relative to earnings. This aligns with the analyst's optimistic outlook and increased price target.
InvestingPro Tips highlight that Matador has raised its dividend for 4 consecutive years, demonstrating a commitment to shareholder returns. This is further supported by a current dividend yield of 1.94% and an impressive dividend growth of 66.67% over the last twelve months. These factors could be of interest to income-focused investors and may be discussed in the upcoming conference call regarding FCF priorities.
The company's financial health appears robust, with a strong revenue growth of 31.71% in the most recent quarter and an EBITDA growth of 17.15% over the last twelve months. These metrics support the analyst's positive stance on Matador's performance and future prospects.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Matador Resources, providing a deeper understanding of the company's financial position and market performance.
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