On Wednesday, Jefferies updated its financial model for Range Resources Corp (NYSE:RRC), resulting in a raised stock price target. The firm now sees the stock reaching $34.00, up from the previous target of $32.00. The Hold rating on the shares remains unchanged.
The revision comes after Jefferies took into account the latest 10-Q filing by Range Resources. The firm adjusted its estimates to reflect a higher expected realization from natural gas liquids (NGLs) and an anticipated shift in the company's liquids mix. Moreover, Jefferies now projects the company's 2024 costs to be slightly below the mid-point of guidance provided by Range Resources.
The analyst from Jefferies highlighted Range Resources' strategic positioning in liquids and its hedging profile as key factors that should enable the company to generate increased free cash flow (FCF) in 2024, despite a backdrop of lower natural gas prices. The firm forecasts Range Resources to produce approximately $457 million in FCF for the year.
The stock price target adjustment reflects Jefferies' confidence in Range Resources' ability to outperform amidst challenging market conditions. The company's updated financial model and cost projections have led to a more optimistic valuation by the firm, now pegged at $34 per share.
Investors and market watchers will be monitoring Range Resources closely to see if the company's performance aligns with Jefferies' projections. The updated stock price target suggests a potential upside from the current trading levels, although the Hold rating indicates that Jefferies advises investors to maintain their positions without further accumulation of shares at this time.
InvestingPro Insights
Following the update from Jefferies on Range Resources Corp (NYSE:RRC), real-time data and insights from InvestingPro further enrich the outlook for the company. Range Resources is currently trading with a market capitalization of approximately $8.38 billion, with a P/E ratio that stands at 17.24, reflecting investor sentiment and the company's earnings potential.
Notably, the adjusted P/E ratio for the last twelve months as of Q1 2024 is lower, at 14.89, suggesting a more favorable earnings perspective when considering the most recent performance.
InvestingPro Tips indicate that while analysts have revised their earnings expectations downwards for the upcoming period, the stock has demonstrated a strong return over the last three months, with a price total return of 24.13%. This could signal confidence from investors in the company's short-term growth potential.
Furthermore, analysts predict the company will be profitable this year, which is consistent with the company being profitable over the last twelve months. This aligns with Jefferies' forecast of substantial free cash flow generation for 2024.
For investors seeking a deeper analysis and more tips, InvestingPro offers additional insights, including the observation that the stock generally trades with low price volatility, which may appeal to investors looking for stability.
With a total of 9 InvestingPro Tips available, investors can gain a comprehensive understanding of Range Resources' financial health and market position. To access these tips and enhance your investment strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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