The oil and natural gas price witnessed a stellar recovery post-pandemic, lifting shares of the companies operating in this space. Take Antero Resources (NYSE:AR) stock, for instance. AR stock is up over 115% year-to-date, reflecting higher price realizations and strong demand. So if you had invested $1K in Antero stock at the beginning of 2022, it would now be worth $2.15K (more than double).
Will AR stock Go Up?
While Antero Resources stock has more than doubled this year, analysts remain bullish, and their average price target indicates further upside. Analysts’ average price target of $50 implies 32.9% upside potential from current levels.
Further, AR stock has six Buys and two Holds for a Strong Buy consensus rating on TipRanks.
TipRanks’ data shows that AR stock has negative signals from hedge funds and insiders who sold its stock. Hedge funds sold 1.6M AR stock last quarter. Meanwhile, insiders sold Antero stock worth $28.7M. Nevertheless, with positive indicators from analysts and retail investors, AR stock scores a nine out of 10 on TipRanks’ Smart Score system, implying better prospects ahead.
Bottom Line
The rally in Antero stock is supported by higher pricing and demand. Antero’s access to premium-priced markets and underinvestment in the sector will drive its financials. During the Q3 conference call, AR’s CEO Paul Rady said, “Antero’s third quarter results reflect the Company’s core strengths that include access to premium priced markets through our firm transportation portfolio and low absolute debt.”
He added, “Through our direct sales contracts along the LNG corridor, we anticipate our premium in basis pricing relative to NYMEX Henry Hub to increase further as additional LNG facilities are placed in service.”
Antero is lowering its debt, its balance sheet remains strong, and it is generating solid free cash flows (learn more about AR’s financials here). This positions the company to return cash to its shareholders through share buybacks and dividends.
The company increased its share repurchase program by $1 billion. Meanwhile, its net debt to TTM (trailing last twelve months) adjusted EBITDAX declined to 0.4x.
Overall, Antero is well-positioned to deliver solid returns to its shareholders. AR stock is trading at a price-to-earnings (P/E) multiple of 5.8, which is well below EQT’s (NYSE:EQT), implying further room for growth. However, a weak macro environment could play spoilsport.
