GOLDMAN SACHS predicts limited upward for Occidental & Magnolia: What Next? – gasoline India

Goldman Sachs Analyst Neil Mehta lowered Magnolia Oil & Gas Corporation Mgy and Occidental Petroleum Corporation Oxywhile restoring the coverage Expanding Energy Corporation ExeS

Mgy: The analyst has lowered the company from buying to neutral and reduced prices for $ 27 to $ 26.

Mehta writes that the bear perspective reflects the company’s superiority to peers.

This presentation is conditioned by effective initiatives to improve costs and focus on capital efficiency in 2024, along with its relatively low lever, the analyst adds.

Although he still envisages a strong operational implementation, he believes that the stock now reflects these advantages.

The analyst calculates that MGY to maintain relatively flat production costs over the next two years, as most of the significant savings of operating costs have been realized through the cost savings initiative in the beginning of 2024.

Oxy: Mehta has lowered the company from Neutral to sell and reduce prognosis for $ 54 to $ 45.

Bear prospects reflect the company’s break on shareholders’ capital returns until significant balance improvements are achieved. In addition, while assets sales can maintain a deliberation, additional clarity of their range and impact is required, the analyzer added.

Given the less attractive risk/reward profile, with an 8% disadvantage compared to 25% up for peers focused on oil, the analyst sees limited potential at the top.

The analyst increased FCF’s estimated yield from 10.0% to 11.0%, citing investors’ increasing focus on capital returns and the higher leverage of the company.

Exe: Mehta resumed the company’s coverage with a purchase rating and a $ 121 prices forecast, which implies 18% up from current levels.

The decision follows the merger of CHESAPEAKE ENERGY (CHK) and Southwestern Energy (SWN)S

The analyst writes that they are expanding Energy’s focus on capital efficiency, disciplined activity and risk management enhance confidence in its operating perspectives.

While the growth of Haynesville gas production is expected to support the increasing demand for liquefied natural gas exports, the presence of a dual pool of the company in Apalachia and Haynesville provides low -cost major business in Apalachia with the potential of expansion in Haynesville by reducing the bass restrictions on the restrictions The pool, adds pool limitations, adds analyzer limitations.

In addition, its flexible operational strategy offers a strong long -term exposure to structural improvements to natural gas prices, the analyst says.

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