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Magnolia Oil & Gas
(NYSE:MGY)
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Rating:68Neutral
Price Target:
$31.00
▲(22.38% Upside)
Action:Downgraded
Date:08/06/26
The score is primarily supported by strong financial performance, especially cash generation and healthy profitability, reinforced by constructive earnings-call guidance and capital discipline. These positives are tempered by weak technicals (price below key moving averages with negative MACD) and deal-related risks (share dilution and higher near-term leverage), while valuation is reasonable with a moderate P/E and a ~2.45% dividend yield.
Positive Factors
Strong cash generation
Magnolia’s substantial operating and free cash flow provides internal funding for drilling, dividends, buybacks and debt reduction. This reduces reliance on external capital and supports resilience through commodity-price cycles.
Negative Factors
Higher leverage from WildFire acquisition
The acquisition changes Magnolia’s historically conservative financing profile and raises interest and refinancing exposure. Management’s target of below 1.0x net debt/EBITDA by year-end 2027 depends on integration, cash flow and commodity conditions.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Magnolia’s substantial operating and free cash flow provides internal funding for drilling, dividends, buybacks and debt reduction. This reduces reliance on external capital and supports resilience through commodity-price cycles.
Read all positive factors
Magnolia Oil & Gas (MGY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.69B
Dividend Yield2.35%
Average Volume (3M)5.39M
Price to Earnings (P/E)12.2
Beta (1Y)0.32
Revenue Growth11.35%
EPS Growth18.91%
CountryUS
Employees262
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)2.30
Shares Outstanding236,968,600
10 Day Avg. Volume9,779,794
30 Day Avg. Volume5,394,992
Financial Highlights & Ratios
PEG Ratio-1.28
Price to Book (P/B)2.09
Price to Sales (P/S)3.10
P/FCF Ratio9.93
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$32.62Price Target Upside28.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)2.87
Revenue Forecast (FY)$1.87B
Magnolia Oil & Gas Business Overview & Revenue Model
Company Description
Magnolia Oil & Gas Corporation is an energy company engaged in the full lifecycle of hydrocarbon resource management: acquisition, development, exploration, and production of crude oil, natural gas, and natural gas liquids (NGLs) within the United...
How the Company Makes Money
Magnolia makes money by producing hydrocarbons from its operated and non-operated wells and selling the resulting volumes of crude oil, natural gas, and NGLs. Revenue is primarily generated from (1) crude oil sales, typically the largest contribut...
Magnolia Oil & Gas Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational execution, record production, high margins (51%), meaningful free cash flow ($235M), and a strategically accretive acquisition (Wildfire) expected to expand scale and long-term free cash flow. However, the acquisition materially increases near-term leverage and dilutes shares (expected fully diluted count ~269M, ~+45.6%), and adds higher-coupon debt and assumed notes. Management provided a clear deleveraging plan (targeting <1x net debt/EBITDA by year-end 2027) and maintained commitments to dividends and buybacks. Overall the positive operational and cash generation highlights outweigh the financing and dilution headwinds given management’s stated accretion and deleveraging path.Positive Updates
Strong Quarterly Profitability
Adjusted net income of ~$184M ($0.99/diluted share) and adjusted EBITDAX of $370M in Q2; pretax adjusted operating income margin averaged 51% (or $25.15/BOE).
Negative Updates
Near-Term Increase in Leverage and Debt Assumption
The Wildfire acquisition increases leverage relative to historical levels; Magnolia will assume Wildfire’s $600M senior notes due 2029 and issued $500M of new notes, increasing near-term debt obligations despite a plan to delever over time.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Quarterly Profitability
Adjusted net income of ~$184M ($0.99/diluted share) and adjusted EBITDAX of $370M in Q2; pretax adjusted operating income margin averaged 51% (or $25.15/BOE).
Read all positive updates
Company Guidance
Magnolia raised standalone 2026 production growth to ~6% (from 5%) and expects Q3 production to be roughly flat with Q2 at about 106,000 BOE/d; Q3 drilling & completion (D&C) capital is planned at ≈$115 million with a company policy to limit D&C reinvestment to 55% of adjusted EBITDAX, and Q3 oil realizations are expected to be about $3/boe below the Magellan East Houston benchmark. Post-close the fully diluted share count is expected to be ~269 million, the effective tax rate ~21% with minimal cash taxes for 2026, pro forma liquidity includes a $2.0 billion borrowing base (elected commitments $1.75 billion), and management plans to aggressively reduce debt toward <1.0x net debt/EBITDA by year‑end 2027 while returning significant free cash flow through a $0.18 quarterly dividend ($0.72 annualized) targeting ~10% long‑term compounding and share repurchases of at least 1% of outstanding shares per quarter.Magnolia Oil & Gas Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
71
Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.48B | 1.31B | 1.32B | 1.23B | 1.69B | 1.08B |
| Gross Profit | 852.26M | 612.67M | 680.69M | 702.37M | 1.26B | 742.76M |
| EBITDA | 1.02B | 883.59M | 922.00M | 874.63M | 1.32B | 796.60M |
| Net Income | 425.81M | 325.25M | 366.03M | 388.30M | 893.84M | 417.28M |
Balance Sheet | ||||||
| Total Assets | 3.14B | 2.90B | 2.82B | 2.76B | 2.57B | 1.75B |
| Cash, Cash Equivalents and Short-Term Investments | 295.94M | 266.79M | 260.05M | 401.12M | 675.44M | 366.98M |
| Total Debt | 393.64M | 419.56M | 410.31M | 409.55M | 399.20M | 397.26M |
| Total Liabilities | 993.71M | 903.92M | 853.51M | 873.55M | 832.39M | 701.49M |
| Stockholders Equity | 2.15B | 1.94B | 1.91B | 1.69B | 1.58B | 816.76M |
Cash Flow | ||||||
| Free Cash Flow | 525.70M | 409.16M | 434.12M | 430.90M | 831.55M | 552.05M |
| Operating Cash Flow | 1.04B | 878.64M | 920.85M | 855.79M | 1.30B | 788.48M |
| Investing Cash Flow | -656.16M | -540.75M | -655.12M | -814.90M | -518.89M | -243.44M |
| Financing Cash Flow | -336.76M | -331.16M | -406.80M | -315.21M | -469.34M | -370.61M |
Magnolia Oil & Gas Technical Analysis
Positive
25.33
Price Trends
25.92
Positive
27.34
Positive
25.96
Positive
Market Momentum
0.55
Negative
65.03
Neutral
93.10
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGY, the sentiment is Positive. The current price of 25.33 is below the 20-day moving average (MA) of 25.63, below the 50-day MA of 25.92, and below the 200-day MA of 25.96, indicating a bullish trend. The MACD of 0.55 indicates Negative momentum. The RSI at 65.03 is Neutral, neither overbought nor oversold. The STOCH value of 93.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MGY.
Magnolia Oil & Gas Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $8.95B | 9.61 | 16.53% | 2.53% | 75.39% | -28.23% | |
72 Outperform | $8.14B | 9.88 | 10.42% | 3.76% | 19.23% | 268.81% | |
68 Neutral | $6.69B | 12.23 | 21.10% | 2.49% | 11.35% | 18.91% | |
68 Neutral | $7.23B | 10.01 | 12.76% | 2.83% | 1.84% | -14.76% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $4.56B | 96.10 | 1.12% | 4.26% | 24.25% | ― | |
60 Neutral | $5.49B | 18.25 | 5.71% | 3.47% | 7.73% | 5.87% |
* Energy Sector Average
MGY
Magnolia Oil & Gas
28.14
4.40
18.51%
MTDR
Matador Resources
58.38
10.53
22.00%
MUR
Murphy Oil
37.41
13.99
59.71%
SM
SM Energy
37.20
9.81
35.83%
CHRD
Chord Energy
147.85
45.24
44.09%
CRGY
Crescent Energy Company Class A
14.06
4.92
53.75%
Magnolia Oil & Gas Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
Magnolia Oil & Gas Delivers Strong Q2 2026 Results
Positive
Aug 5, 2026
On August 5, 2026, Magnolia Oil Gas reported second-quarter 2026 results showing net income of $181.8 million, adjusted EBITDAX of $370.3 million and free cash flow of $234.6 million, all more than doubling year-on-year. Production rose 8% to 106...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Magnolia Oil & Gas Completes Note Offering for Acquisition
Positive
Aug 5, 2026
On August 5, 2026, Magnolia Oil Gas Operating LLC and Magnolia Oil Gas Finance Corp. closed a $500 million private offering of 6.625% senior notes due August 15, 2034, guaranteed on a senior unsecured basis by several Magnolia affiliates. The no...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Magnolia Oil & Gas completes equity offering for acquisition
Positive
Jul 23, 2026
On July 20, 2026, Magnolia Oil Gas entered into an underwriting agreement with J.P. Morgan Securities and other underwriters to issue and sell 46,315,790 shares of Class A common stock at $23.75 per share, with a 30-day option for an additional 6...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Magnolia Oil & Gas prices notes to fund acquisition
Positive
Jul 22, 2026
On July 22, 2026, Magnolia Oil Gas Operating LLC and its finance subsidiary priced a previously announced private offering of $500 million in senior unsecured notes carrying a 6.625% coupon and maturing in 2034. The notes will be sold to qualifie...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Magnolia Oil & Gas Raises Capital for WildFire Deal
Positive
Jul 22, 2026
On July 22, 2026, Magnolia Oil Gas subsidiaries Magnolia Operating and Finance Corp. announced plans for a private offering of $500 million in senior unsecured notes due 2034, to be sold to qualified institutional buyers and certain non-U.S. inve...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Magnolia Oil & Gas to Acquire WildFire Energy Assets
Positive
Jul 20, 2026
Magnolia Oil Gas is acquiring 100% of the interests in WildFire Intermediate Holdings LLC from WildFire Energy I LLC, gaining mostly contiguous assets across about 810,000 net acres in several Texas counties. The acquired properties produce mainl...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
Magnolia Oil & Gas Announces Major WildFire Acquisition
Positive
Jul 20, 2026
On July 19, 2026, Magnolia Oil Gas agreed to acquire 100% of the interests in WildFire Intermediate Holdings from WildFire Energy in a transaction valued at about $4.06 billion, including $2.65 billion in cash, 32.2 million Magnolia Class A share...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.