Civitas Resources initiated with an Outperform at BMO Capital

BMO Capital initiated coverage of Civitas Resources with an Outperform rating and $95 price target. The company’s Denver-Julesburg Basin position supports strong returns and free cash flow, while the recent entrance into the Permian is accretive to asset quality and adds diversification, the analyst tells investors in a research note. The firm says Civitas is now of meaningful scale, which supports better free cash flow generation and capital return. It views the stock’s valuation as inexpensive and at a discount to peers on most metrics.