SilverBow Resources initiated with a Buy at Mizuho

Mizuho initiated coverage of SilverBow Resources with a Buy rating and $40 price target. The analyst says some investors have criticized management’s decision to grow scale through acquisitions and volume growth while taking on higher financial leverage and maintaining protectionist governance practices. While acknowledging the risks, the analyst sees a small cap operator with 10 years of inventory across the Eagle Ford, the ability to optimize capital allocation for commodity prices, organic free cash flow at the futures strip in 2024 that is “protected to some degree” by hedges, and a discounted valuation versus peers.