, an analyst from William Blair, has initiated a new Hold rating on Civitas Resources (CIVI).
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William Blair has given his Hold rating due to a combination of factors influencing Civitas Resources. The company has recently undergone significant changes, including a leadership transition and an increased focus on stock repurchases and cost optimization. Despite these efforts, William Blair anticipates that Civitas will face challenges in generating substantial free cash flow in the near term.
Moreover, while Civitas is making strides in operational efficiencies and cost reductions, there are concerns about its debt levels. The company has reinstated a balanced approach to allocating free cash flow between buybacks and debt reduction, but William Blair suggests that prioritizing debt repayment could mitigate leverage risks. Additionally, the valuation of Civitas shares, when compared to industry peers, suggests a slight downside, which further supports the Hold rating.
In another report released on August 20, UBS also maintained a Hold rating on the stock with a $38.00 price target.