Matador Resources (MTDR) Price Target - July 27

[dan_s]

Matador Resources Company (NYSE: MTDR; 52.76)
Published July 26 2023 17:52:07 EDT

Production Reset but L-T Outlook Remains Good

Rating: Outperform Price Target: 70.00
Our view: MTDR shares traded down ~6% following 2Q23 earnings, where high
investor expectations on 2H23 production needed to be reset. This was related
to well completion deferrals into 4Q23 that reduced the near-term oil production
outlook. Overall our updated cash flow/FCF estimates improved given lower capital
spending, operating costs, and cash taxes that more than offset lower oil volumes.
Our production outlook into 2024 remains unchanged with early indications for
150+ Mboe/d (60+% oil).
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This morning MTDR is up $2.10 at $54.86.
My updated current valuation is $83.50, which is based on 4.75 X annualized operating cash flow per share. < This a reasonable valuation multiple of a company that has consistently generated 20% annual production growth.