Northern Oil & Gas (NOG) Price Target Increase

[dan_s]

TipRanks: "On 1/8/2024 Truist analyst Neal Dingmann raised the firm’s price target on Northern Oil and Gas to $60 from $55 and keeps a Buy rating on the shares as part of a broader sector research note on E&P names. The new and existing well productivity will continue to drive supply/demand dynamics and ultimately commodity prices, the analyst tells investors in a research note. While the firm sees “moderate” commodity prices at $78 in WTI and $2.94 in Henry Hub Natural Gas for most of this year, dominated by incremental supply from solid repeatable activity plans and November election concerns, late 2024/2025 pricing should improve as demand begins to pull away from overall supply and as plans become less repeatable, impacting well productivity, Truist added."

I am updating my forecast/valuation model for NOG and it will be posted to the EPG website this afternoon.

[dan_s]

NOG has a lot of their natural gas hedged at good prices, so Q4 2024 reported results should be impressive.

NOG has a lot of "moving parts" with several significant acquisitions closing in December 2023 and in Q1 2024. Plus, I think it will benefit from the merger of Earthstone into Permian Resources.

Take some time to look at my detailed forecast model for this one. The Company's operating cash flow goes from $482 million in 2022 to over $1.6 billion in 2024.

[aja57]

Love these non operators as they can invest into private E&P operators and as well as less capital expenses. More partial to Granite Ridge Resources (GRNT). Dividend is almost double of NOG. David Trainor at New Constructs has calculated with his forensic accounting analysis that GRNT has a FCF yield of 17%, ROIC of 48% and price to economic book value of 0.2. The latter means that GRNT value at zero growth would be $33.