On Monday, Mammoth Energy (NASDAQ:TUSK) saw its stock price target lowered by Singular Research to $4.30, down from the previous target of $6.95. Despite the decrease, the firm maintained its Buy-Long Term rating on the energy company's stock.
The adjustment comes after a reported decline in revenue and earnings for Mammoth Energy in the fourth quarter of 2023, attributed to reduced demand for energy field service equipment.
The company has recently made progress in collecting overdue receivables, having received $64 million from the Puerto Rico Electric Power Authority (PREPA). There is also the potential for an additional $20 million in the near future. While near-term revenue growth poses a challenge for Mammoth Energy, the resolution of outstanding receivables from PREPA could positively impact the company's stock value.
Singular Research has revised its estimates for Mammoth Energy in light of the current market conditions affecting the company. The firm's analyst cited the recent collection from PREPA and the potential for further payments as factors that could significantly benefit TUSK shares in the long run.
Despite the lowered price target, the outlook for Mammoth Energy remains optimistic with the maintained Buy-Long Term rating. The firm believes that the eventual settlement of the remaining receivable from PREPA could provide a substantial boost to the company's financial position.
The new stock price target of $4.30 reflects a more cautious valuation of Mammoth Energy's stock, taking into account the headwinds faced by the company but also recognizing the potential for future gains. The firm's stance suggests that Mammoth Energy may still present a viable long-term investment opportunity.
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