Investing.com -- Morgan Stanley initiated coverage on eight North American exploration and production companies rating them under Overweights, Equal-weights, and Underweight.
MS rated Civitas Resources Inc (NYSE:CIVI) Permian, Expand Energy Overweight.
Civitas trades at over twice the free cash flow yield of peers and offers around 15% shareholder return yield in 2025. While, Expand Energy, the largest independent U.S. natural gas producer, benefiting from LNG export demand and rising free cash flow.
MS had Equal-weights ratings on Chord Energy, Comstock Resources (NYSE:CRK) Matador Resources (NYSE:MTDR) Tourmaline Oil
MS noted that Chord has a durable free cash flow and stable returns, with valuation is in line with peers. While Comstock’s Haynesville gas-focused with long-term optionality but limited near-term free cash flow.
Matador Resources is Delaware-focused with integrated midstream operations; MS noted that shareholder returns trail peers. Tourmaline, which is Canada’s largest natural gas producer, has modest production growth but lower free cash flow yield compared to peers.
MS had Underweight rating on CNX Resources (NYSE:CNX), as it noted a highly hedged portfolio limits benefits from rising gas prices, and free cash flow yield underperforms peers.