Permian Resources Corp. facing challenges in oil and gas industry, but analysts predict potential rebound.

From Nasdaq: 2024-10-02 08:30:00

The U.S. oil and gas industry is facing challenges in 2024 due to falling natural gas prices and political uncertainty, leading to decreased cash flow for leading firms. However, some companies like Antero Resources Corp. and Pembina Pipeline Corp. are benefiting from increased crude oil production despite negative trading in the Permian Basin.

Permian Resources Corp. shares have dropped by over 22% in the last six months, underperforming competitors. Despite this, the company has a history of cost management, successful M&A activity, and strong earnings that may attract investors at lower share prices.

Permian Resources focuses on cost management by keeping lease operating expenses low and reducing overall cash costs, contributing to free cash flow growth. Total production has increased by 6% with $332 million in adjusted free cash flow generated in the second quarter, marking a 60% increase from last year.

In September, Permian completed an acquisition that expanded its resource base and production capacity, showcasing a successful series of deals that have lowered costs. Analysts are optimistic about future earnings growth potential, leading to increased dividends and a share buyback program for investors.

Analysts predict Permian Resources has the potential to rebound and increase share value, with an average price target of $19.20, representing a 39% upside. Despite external uncertainties, Permian’s solid history and efficient operations make it a promising investment for long-term investors.



Read more at Nasdaq:: Opportunity Knocks: Buy the Dip on Permian Resources Stock?