Antero Resources (AR) Valuation Update - Aug 6

[dan_s]

I have updated my forecast valuation model for AR for Q2 results and increased production guidance.

AR was trading at $25.47 at the time of this post.

My valuation is now $28/share.

The Wall Street Gang does like this company: TipRanks: "In the last 3 months, 13 ranked analysts set 12-month price targets for AR. The average price target among the analysts is $37.44. The 13 price targets range from $32 to $41."

The majority of AR's revenues now come from liquid sales.

Production mix is approximately 62% natural gas, 2% oil, 36% NGLs.

Looking past 2024: In 2024, AR's operating cash flow of approximately $850,000 should generate about $50 million of free cash flow (all coming in Q4). If natural gas prices do push up to $3.50/MMBtu in 2025, AR's operating cash flow should more than double to over $1.9 billion. Maintenance capex is around $800 million.

AR is on my Watch List for promotion back to the Sweet 16, but TODAY I rank CTRA and RRC above it because they pay dividends and have stronger balance sheets.