On Thursday, Jefferies updated its outlook on Range Resources Corp (NYSE:RRC), raising the price target to $32.00 from the previous $31.00, while maintaining a Hold rating on the stock. The firm expects Range Resources to report a solid operational quarter and forecasts first-quarter EBITDA and cash flow per share (CFPS) at $309 million and $1.12, respectively. These figures are slightly above consensus estimates which predict $306 million in EBITDA and $1.13 in CFPS.
The analyst from Jefferies anticipates Range Resources to generate free cash flow (FCF) of $110 million for the first quarter of 2024. This performance would align with the company's objective of reaching the upper end of its net debt target range of $1 billion to $1.5 billion. The focus for the upcoming period is expected to be on the allocation of free cash flow throughout 2024, with predictions of a balanced approach towards stock buybacks and debt repayment.
Additionally, the market is looking forward to Range Resources' guidance for the rest of the year, which the company is likely to reiterate. Analysts are also keen on updates regarding capital efficiencies, well productivity improvements, and the company's hedging strategy for 2025. Jefferies has adjusted its estimates to reflect current market conditions, leading to the new price target of $32.
The Hold rating suggests that while Jefferies has a positive view on Range Resources' near-term financial performance and strategic planning, it advises investors to maintain their current positions without increasing their holdings at this time. The raised price target indicates a slight increase in the firm's expectations for the stock's future performance.
InvestingPro Insights
As Jefferies updates its outlook on Range Resources Corp (NYSE:RRC), it's pertinent to consider the latest metrics and analysis from InvestingPro. With a current market capitalization of $8.52 billion and a P/E ratio of 9.72, Range Resources is showing signs of affordability in its sector. Notably, the stock's P/E ratio has been adjusted to 9.05 over the last twelve months as of Q1 2023, reflecting a slightly more favorable valuation for investors considering entry points.
InvestingPro Tips indicate that analysts have revised their earnings downwards for the upcoming period, suggesting that investors should monitor upcoming earnings reports closely. However, the stock's low price volatility and the fact that liquid assets exceed short-term obligations provide a degree of stability. Additionally, Range Resources' stock is trading near its 52-week high and has shown a strong return over the last three months, with a 16.3% total return, which could signal momentum that aligns with Jefferies' raised price target.
For investors seeking a comprehensive analysis, there are additional InvestingPro Tips available that delve deeper into Range Resources' financial health and market position. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking an array of insights to inform investment decisions.
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