William Blair analyst Neal Dingmann has maintained their bullish stance on REPX stock, giving a Buy rating on November 25.
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Neal Dingmann has given his Buy rating due to a combination of factors that highlight Riley Exploration Permian’s strategic financial maneuvers and growth potential. The company recently completed a strategic sale of its midstream project, which has significantly improved its financial position by bringing in upfront cash flows and reducing leverage. This move is particularly beneficial as it aligns with investor focus on the balance sheet, providing the company with the necessary funds to pursue further upstream and power opportunities.
Additionally, Riley Exploration Permian’s valuation appears attractive when compared to its peers. The company’s shares trade at a lower EV/EBITDAX multiple and higher free cash flow yield than the group average, suggesting potential for significant upside. Dingmann believes that the company’s power business line deserves a premium multiple, which could lead to a fair value of $47 per share, representing a 71% upside. However, he also notes potential risks such as commodity price fluctuations, changes in service and labor costs, and challenges in replacing development inventory at reasonable prices.
Dingmann covers the Energy sector, focusing on stocks such as Civitas Resources, EQT, and Matador Resources. According to TipRanks, Dingmann has an average return of -0.3% and a 42.64% success rate on recommended stocks.
In another report released on November 25, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $32.00 price target.