KeyBanc sees structural gains driving Gulfport Energy stock higher
On Monday, Gulfport Energy (OTC:) (NYSE:GPOR) received an upgraded stock rating from Sector Weight to Overweight by KeyBanc, with a maintained price target of $160.00.
The upgrade comes after a period of underperformance for Gulfport Energy’s shares, which have declined 13.4% since July 3, a steeper drop than the XOP’s 8.7% fall during the same period.
KeyBanc’s decision is rooted in a steady outlook for and confidence in the fundamental prospects of the company. The firm acknowledges the presence of macroeconomic challenges, yet it considers slowing economic growth to pose a greater threat to oil-focused exploration and production companies than to those concentrating on natural gas.
The investment firm’s stance is bolstered by anticipated structural improvements in the natural gas supply and demand balance. This perspective has led to the reiteration of the $160 price target for Gulfport Energy’s shares, which is unchanged from the previous Overweight rating earlier this year.
KeyBanc anticipates Gulfport Energy’s second-quarter earnings, which are to be disclosed Tuesday night, to be unremarkable. This expectation, coupled with the recent closing price of Gulfport Energy’s shares below $136 on Friday, has prompted KeyBanc to adopt a tactical approach with the current upgrade.
In other recent news, Gulfport Energy has seen its stock target cut by $6 by Truist Securities, although the firm maintains a buy rating on the stock. This adjustment was made following a revision of the firm’s financial model for Gulfport Energy, which resulted in new forecasts for the years 2024 through 2026.
Despite the lower target, Gulfport Energy reported impressive Q1 financials, with $186 million in adjusted EBITDA and $39 million in adjusted free cash flow. The company also reaffirmed its commitment to shareholder value, primarily through common share repurchases.
Gulfport Energy’s operational efficiency was highlighted with an average daily production of nearly 1.054 billion cubic feet equivalent and the completion of 8 gross wells.
Looking ahead, the company announced plans for a 4-well Marcellus development in early 2025 and confirmed its full-year production and capital guidance. Gulfport Energy’s strong financial position, with a net leverage ratio of 0.9 times and liquidity of $757 million, supports these recent developments.
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