William Blair initiated coverage of Civitas Resources (CIVI) with a Market Perform rating. The firm notes Civitas has recently made some notable moves – replacing its CEO, stepping up stock repurchases, and further optimizing costs. However, William Blair still believes there is some wood to chop for the company to deliver material free cash flow, which it forecasts to remain relatively moderate until mid-2026. Further, the firm thinks Civitas could look to sell the entire company. Overall, Blair believes Civitas could likely trade at 3.0-times and 15%; applying a 3.0-times multiple and 15% yield suggests an equally weighted fair value of $30 per share, or 7% downside.
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