Analyst Noah Hungness of Bank of America Securities maintained a Sell rating on HighPeak Energy, with a price target of $7.00.
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Noah Hungness’s rating is based on several financial and operational challenges faced by HighPeak Energy. The company’s EBITDAX for the second quarter of 2025 fell short of expectations, primarily due to lower oil production and higher lease operating expenses, despite better-than-expected realizations for natural gas and natural gas liquids. This shortfall in operational performance led to cash flow from operations being significantly below estimates, while capital expenditures exceeded projections, resulting in negative free cash flow.
Additionally, HighPeak Energy’s net debt increased, and the company remains sensitive to fluctuations in oil prices, which adds to the risk profile. Although the company extended its Term Loan maturity to 2028, avoiding the high yield market, the overall financial outlook remains cautious. These factors contribute to a maintained Underperform rating, with a price objective set below the current market price, reflecting concerns over the company’s financial health and operational efficiency.