Citi downgraded Liberty Energy (LBRT) to Neutral from Buy with a price target of $19, down from $25. The “downcycle appears to be intensifying” as Liberty s idling two fleets while pricing concessions are compressing margins, the analyst tells investors in a research note. Citi sees seasonal improvement in the first half of 2025 but believes exploration and production companies will continue to push for pricing concessions given oil price risk. With EBITDA dropping faster than capex, the firm’s 2025 free cash flow estimate for Liberty drops to $180M, implying “just” a 6% yield at the current share price. In addition, with seasonal working capital headwinds in Q1, the company’s buyback capacity appears limited near term without using the balance sheet, notes Citi.
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