Analyst Hanwen Chang from Wells Fargo maintained a Hold rating on Vital Energy and increased the price target to $22.00 from $21.00.
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Hanwen Chang has given his Hold rating due to a combination of factors influencing Vital Energy’s current and future performance. The company’s production levels are expected to align with forecasts, but financial outcomes might be mixed due to lower commodity price realizations impacting free cash flow. While cost reduction strategies are progressing well, with lowered lease operating expenses and general administrative costs, the major improvements in these areas have already been realized.
Additionally, Vital Energy’s strategic shift in drilling activity is aimed at enhancing operational flexibility, though it results in higher capital expenditure in the short term. The outlook for 2026 suggests stable oil volumes without significant production growth, focusing instead on optimizing existing inventory and reducing debt. Despite some service cost deflation, inflation in steel and tariffs could negate these savings, contributing to the Hold rating as the company navigates these financial and operational challenges.
According to TipRanks, Chang is an analyst with an average return of -1.1% and a 45.59% success rate. Chang covers the Energy sector, focusing on stocks such as Viper Energy, Vital Energy, and Matador Resources.
In another report released yesterday, Citi also maintained a Hold rating on the stock with a $20.00 price target.