Truist upgraded Coterra Energy to Buy from Hold with a price target of $35, up from $27. The firm forecasts Coterra is on pace to potentially generate $2.5B of free cash flow in 2025. This sets up a “solid shareholder return story even while recently slowing natural gas activity given relatively weak current prices,” the analyst tells investors in a research note. Truist says that while oil remains the focus, it estimates Coterra ‘s current valuation reflects $3.00/mcf natural gas prices versus many pure gas operators reflecting as high as $3.50/mcf, “providing notable upside if the current strip proves accurate.” It says the company is uniquely positioned to benefit from continued oil and/or gas upside.
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