Permian Resources (PR) Valuation Update - July 26

[dan_s]

At the time of this post PR was trading at $15.07.

TipRanks: "In the last 3 months, 12 ranked analysts set 12-month price targets for PR. The average price target among the analysts is $20.67. The 12 price targets range from $17 to $23, with the most recent price target from Piper Sandler of $23 dated 7/25/2024."

My valuation stays at $24.00, based on 5.5 X annualized operating cash flow per share.
> PR should generate over $1.5 billion of free cash flow this year.
> It has lots of Tier One "Running Room"
> It is a pure play on the Permian Basin.
> If Q2 results beat my forecast, a higher valuation multiple should be justified.

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

PS: There is nothing in my model for a possible acquisition from OXY.