October 14, 2024

Gulfport Energy: Hold Rating Justified by Mixed Performance and Strategic Shifts

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Mizuho Securities analyst Nitin Kumar CFA has reiterated their neutral stance on GPOR stock, giving a Hold rating on October 4.

Nitin Kumar CFA has given his Hold rating due to a combination of factors impacting Gulfport Energy’s performance and outlook. The company is expected to slightly miss its EBITDA and free cash flow targets, with an approximate 4% and 2% shortfall respectively. This anticipated underperformance is mitigated by the ongoing strategic shift towards liquid-rich assets and operational advancements in the Utica and SCOOP basins. Furthermore, Gulfport’s capital allocation for 2025, particularly concerning discretionary land spending and potential reinvestment opportunities, is a focal point for investors.
Kumar’s assessment also considers the company’s capital savings and how it might be allocated, whether for balance sheet improvements, increased shareholder returns, or reinvestment into drilling programs. The valuation of Gulfport Energy’s shares at $174 by Kumar, when compared to industry peers, indicates that the stock is currently trading at a lower EV/EBITDAX multiple. Despite this, the company’s shift in strategy and capital planning presents an uncertain outlook, thus justifying the neutral stance and leading Kumar to maintain a Hold rating on GPOR stock.

In another report released on October 4, Evercore ISI also downgraded the stock to a Hold with a $170.00 price target.

GPOR’s price has also changed slightly for the past six months – from $157.690 to $149.950, which is a -4.91% drop .

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Gulfport Energy (GPOR) Company Description:

Gulfport Energy is an independent exploration and production company concentrating on the Utica Shale play in Appalachia. At the end of 2018, the company reported proved reserves of 4,743 billion cubic feet of natural gas equivalent. Daily production averaged approximately 1,392 million cubic feet of natural gas equivalent in 2018 at a ratio of 10% liquids and 90% natural gas.

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