Civitas Resources (CIVI) Price Target Update - Jan 15

[dan_s]

On January 13th Neal Dingmann at Truist Financial updated his price target for CIVI to $80 on TipRanks. Neal is a 5-Star rated energy sector analyst.

TipRanks: "In the last 3 months, 12 ranked analysts set 12-month price targets for CIVI. The average price target among the analysts is $71.00. The 12 price targets range from $60 to $84." The $84 price target is from Tim Rezvan at KeyBanc on January 3rd.

Civitas has a "Base + Variable" dividend policy. For the dividend that was paid on December 27th the Board decided to pay only the base dividend of $0.50/share for the quarter. The previous dividend that was paid on September 26th was $1.52/share.

The unexpected dividend reduction pissed off a lot of shareholders that want dividends. The Board changed the rules in the middle of the game.

Civitas is a very profitable company that generated close to $1.2 Billion of free cash flow in 2024. Their Cash Flow From Operations actually increased by close to $1 Billion from 2023 to 2024. The reason the Company made for cutting the dividend was that they wanted to buy back more shares and pay down debt heading into year-end. It was a "wise" thing to do, but handled poorly.

My updated forecast/valuation model has been posted to the EPG website.