Civitas Resources (CIVI) Valuation Update - Apr 11

[dan_s]

At the time of this post CIVI was trading at $74.77.

Neal Dingmann at Truist Financial and Mark Lear at Piper Sandler (both rated 5-Stars by TipRanks), have recently rated CIVI as a BUY with identical price targets of $103/share. In the last 3 months, 6 ranked analysts set 12-month price targets for CIVI. The average price target among the analysts is $91.02. < The other four price targets are from analysts' reports dated before March, so based on much lower oil prices.

I have updated my forecast/valuation model for my updated oil & gas price deck. My valuation increases to $112/share.

Civitas closed the Midland Basin Acquisition from Vencer Energy on January 2nd. It adds ~62,000 Boepd of current production (50% crude oil).

CIVI is in our High Yield Income Portfolio because it pays a large "Base + Variable" quarterly dividend. Total dividends paid in 2023 were $7.60/share. Based on my forecast, this year's dividends should total $7.81/share for annualized yield of ~10.4% based on today's share price.

CIVI also is a Growth Company. Production increased by 24.5% YOY in 2023. Primarily due to the Vencer acquisition, production should increase by more than 58% this year based on the Company's guidance.

My updated forecast model has been posted to the EPG website.