David Deckelbaum, an analyst from TD Cowen, maintained the Buy rating on Civitas Resources. The associated price target is $37.00.
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David Deckelbaum has given his Buy rating due to a combination of factors including Civitas Resources’ strong third-quarter performance and strategic financial maneuvers. The company’s production exceeded expectations, with total production increasing by 6% quarter-over-quarter in both the Permian and DJ basins. This was achieved despite a recent asset sale that slightly impacted output. Additionally, Civitas Resources managed to keep cash costs low, which helped offset capital expenditures that were slightly above consensus estimates.
Another reason for the Buy rating is the company’s effective balance sheet management. During the third quarter, Civitas repurchased approximately $250 million of its stock, reducing the number of shares outstanding by 8%. They also decreased net debt by about $237 million, demonstrating a commitment to returning capital to shareholders while strengthening their financial position. Furthermore, the company has hedged a significant portion of its future gas and oil production, providing some stability against market volatility. These strategic actions, coupled with the anticipated benefits from the upcoming merger with SM, support the positive outlook for Civitas Resources.
According to TipRanks, Deckelbaum is a 3-star analyst with an average return of 3.6% and a 38.12% success rate. Deckelbaum covers the Energy sector, focusing on stocks such as Sable Offshore, APA, and Coterra Energy.