Piper Sandler has reiterated a Neutral rating on Range Resources (NYSE: NYSE:RRC), maintaining a $31.00 price target.
The firm recognized the energy company's third-quarter performance, which surpassed expectations due to robust gas and natural gas liquids (NGL) volumes and pricing.
Range Resources has adjusted its full-year 2024 capital expenditure to the upper half of the previously stated range, now anticipating a daily production rate of 2.17 billion cubic feet equivalent (bcfe/d). This forecast is marginally higher than the previous high-end estimate of 2.12-2.16 bcfe/d.
In its strategic planning, Range Resources has slightly reduced its full-year 2024 "turn in line" (TIL) guidance, opting to defer sales from two completed dry gas wells in the Northeast Pennsylvania region until the beginning of the following fiscal year. Moreover, the company has increased its full-year 2024 NGL differential guidance, achieving a 19% premium over the Mt. Belvieu benchmark prices, thanks to access to lucrative export markets.
Piper Sandler's analysis suggests that the market will react positively to the company's third-quarter earnings beat and the improved pricing outlook. The firm's commentary reflects an anticipation of investor optimism following Range Resources' latest financial results and strategic updates.
In other recent news, Range Resources reported a third-quarter free cash flow that was 63% higher than consensus estimates, with capital expenditures 6% lower than anticipated, according to Stephens. This performance was boosted by better-than-expected production figures and realized pricing.
Stephens subsequently raised its price target for Range Resources while maintaining an Overweight rating on the stock. Additionally, Barclays upgraded the company's stock from Underweight to Equalweight, while Piper Sandler downgraded it from Overweight to Neutral.
Range Resources also reported a mixed derivative fair value income of $47.1 million for the third quarter, despite a total non-cash fair value loss of $65.1 million. The company also saw a net cash receipt on derivative settlements totaling $112.3 million.
In other developments, Mizuho Securities maintained its Outperform rating on Range Resources, following meetings with the company's CEO, CFO, and VP of Investor Relations. The firm believes the company is well-positioned to benefit from the expected shift in the U.S. natural gas market from an oversupply to an undersupply by 2025. Range Resources is also focusing on reducing its debt, aiming to achieve a net debt to EBITDA ratio of approximately 1.1x by the end of 2024.
InvestingPro Insights
Range Resources' recent performance and strategic adjustments are reflected in several key financial metrics and insights from InvestingPro. The company's market capitalization stands at $7.24 billion, with a P/E ratio of 14.96, indicating a relatively moderate valuation compared to earnings. This aligns with the company's recent earnings beat and strategic positioning in the market.
An InvestingPro Tip highlights that Range Resources operates with a moderate level of debt, which could provide flexibility in its capital expenditure plans and production strategies. This is particularly relevant given the company's decision to adjust its full-year 2024 capital expenditure to the upper half of the previously stated range.
Another important metric is the company's revenue of $2.33 billion for the last twelve months as of Q2 2024, with a gross profit margin of 41.08%. This robust profitability is consistent with the company's ability to secure premium pricing for its NGL production, as mentioned in the article.
InvestingPro offers 7 additional tips for Range Resources, providing investors with a more comprehensive analysis of the company's financial health and market position. These insights can be particularly valuable for understanding the long-term implications of Range Resources' current strategic decisions.
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