Range Resources (RRC) Valuation Update - Feb 28

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Range Resources (RRC) Valuation Update - Feb 28

Post by dan_s »

I have updated my forecast/valuation model for RRC and sent it to Sabrina for posting. It will be on the EPG website this afternoon.
(FYI: Sabrina has to do something special to get the Sweet 16 profiles and forecast models posted under the Sweet 16 company logos. That's why it takes a bit longer.)

At the time of this post RRC was trading for $27.31. I have increased my valuation by $1.50 to $31.50/share.

TipRanks: "In the last 3 months, 13 ranked analysts set 12-month price targets for RRC. The average price target among the analysts is $31.36. The 13 price targets range from $24 to $44."

During 2022 Range's average realized natural gas price was $4.20/mcf, net of differentials and cash settlements on their hedges. For 2023, based on my current oil & gas price deck (shown on page 7 of today's newsletter), Range's realized natural gas price should be $2.85/mcf. Per my forecast, Range should generate operating cash flow of $1.1 billion this year and over $500 million of free cash flow.

A lot of their hedges this year are collars with ceiling of $4.28 to $4.77, so if natural gas price do move up to that level, Range will generate a lot more free cash flow.
Dan Steffens
Energy Prospectus Group
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