Crescent Energy (CRGY) Valuation - Nov 4

[dan_s]

I have updated my forecast/valuation model for Crescent Energy as a stand alone company. My valuation remains at $22/share. < The merger of Vital Energy into Crescent Energy is expected to be accretive on all per share financial measures, so my post-closing valuation will be a few dollars higher.

CRGY Q3 2025 production was 253,000 Boepd.

My stand alone production forecast for 2026 is 260,000 Boepd with a mix of 40.5% crude oil, 41.5% natural gas, and 18% NGLs.

My stand alone forecast compares to TipRanks forecasts as follows. Four of the eight analysts that cover CRGY have submitted forecast models that clearly include the merger with Vital Energy closing in December.
For 2026: My Forecast / TipRanks

Revenues: $3,619 million / $4,760 million
Net Income per share: $0.96 / $1.47
Operating CF per share: $5.99 / $7.63 < Over $1.5 billion total operating cash flow per my forecast

There is no way to justify the current share price of $8.23 based on the current TipRanks' forecasts. < Half of the price targets included in the TipRanks current consensus price target of $13.86 are more than six weeks old and they are based on much lower natural gas prices than we have today.

My valuation of $22 per share is based on just 3.5 X annualized operating cash flow per share, which I believe is a conservative multiple for a company of this size. Crescent Energy has oil hedges in place for Q4 2025 at $68.52/bbl that exceed their current oil production, so it has very little oil price risk. Vital Energy also has hedges in place for over 93% of their oil production.

Bottomline: When the merger with Vital Energy closes within a few weeks, this company is going to draw a lot of attention. If it is added to the S&P 500 Index there will be a whole lot of new buyers.

This weekend I will update my Vital Energy forecast and then update my proforma forecast for Post-Closing CRGY.