On Thursday, Susquehanna increased its price target on shares of Permian Resources Corp (NASDAQ:PR) to $16.00, up from the previous $15.00, while maintaining a Neutral rating on the stock. The firm's decision follows Permian Resources' fourth-quarter results for 2023, which surpassed expectations, with production almost 8% higher than forecasted.
The company's recent acquisition of ESTE is yielding benefits sooner than anticipated, as highlighted by reduced well costs and less downtime. The financial outlook for the full year 2024 includes a production guidance that exceeded analysts' projections, while capital expenditure met expectations. Permian Resources is planning to concentrate its activities in the first half of the year, with production ramping up in the latter half.
Permian Resources is committed to returning 50% of its free cash flow to shareholders after its base dividend, which has recently seen a 20% increase. The robust production figures for the fourth quarter of 2023 were particularly noteworthy, with 285 million barrels of oil equivalent per day (Mboe/d), which was almost 8% higher than anticipated due to strong well performance and enhanced efficiency in operations.
The company's cost control measures have also been effective, resulting in an 8% quarter-over-quarter decline in controllable costs. These efforts contributed to an adjusted diluted earnings per share (EPS) of $0.43, which exceeded the estimate by $0.08. The improved financial performance and operational efficiencies have been key factors in Susquehanna's updated valuation of Permian Resources' stock.
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