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Wells Fargo downgrading Southwestern Energy (NYSE:SWN) to Underweight from Equal Weight and Antero Resources (NYSE:AR) to Equal Weight from Overweight
To reflect the bank’s downwardly revised natural gas price outlook to an average $2.50/Mcf for 2023 and $2.91/Mcf for 2024.
While Southwestern Energy (SWN) is well positioned in global LNG trade in 2025 and beyond, Read said he sees continued headwinds due to its lack of capital returns and weak free cash flow generation in a weak natural gas environment.
The analyst largely cited Antero Resources’ (AR) largely unhedged production profile for the company’s likely below-average free cash flow generation in FY 2023.
Read maintained an Overweight rating and $39 price target for EQT Corp. (EQT) and Equal Weight ratings for Chesapeake Energy (CHK) and Coterra Energy (CTRA).
Antero Resources’ (AR) cash performance will be significantly impaired by collapsing natural gas pricing, but a negative cash flow scenario looks unlikely, Patient Tech Investor writes in an analysis published recently on Seeking Alpha.
Wells Fargo upgraded Range Resources (NYSE:RRC) +0.7% the stock to Overweight from Equal Weight with a $31 price target
Range Resources (RRC) stands out among gas peers on 2023 capital efficiency, thanks to its low corporate base decline rate and prudent hedging strategy, Wells Fargo’s Roger Read said, expecting the company will deliver 6.3% FCF/EV yield in 2023 and 10.9% in 2024 vs. the respective 3.8% and 7.2% gas group median while opportunistically executing stock buybacks.
Natural gas futures continue to be weighed down by strong production and ample storage inventories following a mild winter. Benchmark May Nymex natura
[See the full post at: Into The Vortex – Natural Gas Outlook for the Week Ahead]
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