On Friday, RBC Capital Markets adjusted its stock price target for Liberty Oilfield Services (NYSE:LBRT), reducing it to $23.00 from the previous $26.00. Despite this change, the firm maintains an Outperform rating on the shares. The revision follows Liberty's reporting of lower than expected EBITDA and a less optimistic view of future fracking activity and pricing towards the end of 2024.
The company's second half of 2024 outlook, along with a diminished forecast for free cash flow, has tempered enthusiasm somewhat, yet RBC Capital Markets still holds a positive outlook on the stock. The analyst from RBC noted the potential for a significant update from Liberty Power Innovations (LPI) in early 2025, which could serve as a catalyst for the company's share value.
In light of the recent report and future projections, RBC Capital Markets has revised its EBITDA estimates for 2024 and 2025 downward by 7% and 13%, respectively. Despite these adjustments, the firm's Outperform rating remains in place, with a revised price target that reflects the updated financial expectations.
The reduction in the price target comes as a response to the company's current financial performance and market conditions. The analyst's comments suggest that while the near-term outlook has become more conservative, there remains optimism for Liberty Oilfield Services' growth potential, especially with the anticipated developments from Liberty Power Innovations on the horizon.
Investors and stakeholders in Liberty Oilfield Services will be keeping a close eye on the company's performance in the coming months, as well as any updates regarding Liberty Power Innovations, which could influence the company's share price and future financial trajectory.
In other recent news, Liberty Oilfield Services has been downgraded from Buy to Neutral by Citi, which also lowered its target price to $19. Citi's analysts have revised their fourth-quarter EBITDA estimate for the company by 22% to $172 million, while the firm's outlook for 2025 is less optimistic with EBITDA projections being cut by more than 20% to $793 million. They also predict a capital expenditure of approximately $550 million for the next year.
In other developments, Liberty Oilfield Services reported a robust third quarter for 2024, with revenues hitting $1.1 billion and an adjusted EBITDA of $248 million. Despite facing market pressures, the company increased its quarterly cash dividend by 14% to $0.08 per share and spent $39 million on share repurchases.
Liberty Energy executives anticipate increased completions activity and healthy free cash flow generation in 2025. They project Q4 capital expenditures to be around $200 million and forecast 2025 capital expenditures at approximately $650 million. These recent developments indicate that Liberty Energy is committed to efficiency improvements and strategic investments.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Liberty Oilfield Services' (NYSE:LBRT) financial position and market performance. Despite the reduced price target from RBC Capital Markets, LBRT maintains a P/E ratio of 9.66, suggesting the stock may still be reasonably valued. The company's revenue for the last twelve months as of Q3 2024 stood at $4.45 billion, with a gross profit margin of 27.22%.
InvestingPro Tips highlight that LBRT has raised its dividend for 3 consecutive years, demonstrating a commitment to shareholder returns. This is further supported by a current dividend yield of 1.75%. Moreover, analysts predict the company will remain profitable this year, aligning with RBC's maintained Outperform rating.
However, it is worth noting that LBRT's stock has taken a significant hit over the last week, with a 1-week price total return of -10.51%. This recent downturn may reflect the market's reaction to the company's less optimistic outlook for late 2024, as mentioned in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for LBRT, providing deeper insights into the company's financial health and market position.
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