Analyst Chris Wheaton from Stifel Nicolaus maintained a Buy rating on Vaalco Energy (EGY – Research Report) and decreased the price target to p704.00 from p753.00.
Chris Wheaton has given his Buy rating due to a combination of factors that reflect Vaalco Energy’s strategic investments and operational efficiencies. The company is pushing forward with significant capital investments in Cote d’Ivoire and Gabon, which are expected to enhance future production capabilities. Despite an increase in capital expenditure forecasts for 2025 and 2026, the production sharing contract structure in these regions is anticipated to ensure a return on investment, mitigating the impact on the company’s net asset value.
Additionally, cost-saving measures in Gabon have successfully reduced operational expenses, contributing to a positive outlook. While the forecast for free cash flow in 2025 is lower than previously expected, projections for 2026 and beyond show an improved financial performance as the investments begin to yield returns. These strategic moves and financial projections underpin Wheaton’s confidence in the company’s growth potential, justifying the Buy rating.
In another report released on March 17, Canaccord Genuity also reiterated a Buy rating on the stock with a p565.00 price target.