Comstock Resources (CRK) Update - April 13

[dan_s]

I have updated my valuation of CRK based on my updated natural gas price deck.
My valuation is just 4X annualized operating cash flow for 2021-2023. If CRK's Q1 results and updated guidance (on May 3) confirm my model assumptions, the company should deserve a higher valuation multiple.

Comstock is close to a pure play on natural gas. ~99% of their daily production (s/b 1.40 to 1.45 Bcfepd in 2022) is dry gas from the Haynesville Shale play.

My valuation increases from $22.00 to $26.50.

TipRanks on 4/8/2022
Comstock Resources price target raised to $20 from $13 at Mizuho
"Mizuho analyst Vincent Lovaglio raised the firm's price target on Comstock Resources to $20 from $13 and keeps a Buy rating on the shares. The analyst increased his long-term natural gas price forecast to $3.65/mcf from $3.30/mcf to reflect a greater expected call on U.S. natural gas exports as Europe seeks to displace Russian gas imports. He believes the U.S. will need to support 2bcf per day or more of annual export growth longer-term, "with persistently high global gas prices providing an opportunity for gas producers able to take on international price exposure."

My long-term natural gas price forecast is $5.00/mcf, which I will explain on tomorrow's webinar.

My updated forecast/valuation model will be posted to the EPG website this afternoon.

I will also update AR, CTRA, RRC and SBOW today.