Crescent Energy (CRGY) Price Target - Nov 19

[dan_s]

I am finishing my review of the updated profile for Crescent Energy today.

TipRanks: Based on 5 Wall Street analysts offering 12-month price targets for Crescent Energy Company Class A since November 4th, the average price target is $12.625 with a high forecast of $15.00 and a low forecast of $10.50. < All five of the most recent energy sector analysts to submit new updated price targets this month rate CRGY a BUY at the current share price.

Based on their updated revenue forecasts all of them are expecting the merger of Vital Energy into Crescent Energy to close mid-December. Their updated revenue forecasts for Q4 2025 are ~6% higher than my Q4 forecast of $923 million. Their 2026 revenue forecasts are ~13% lower than my 2026 revenue forecast of $5,556 million, because they are using lower oil & gas prices than my forecasts of $62.50/BO WTI oil and $4.00/mcf for HH Ngas.

My 2026 forecast is based on more conservative expenses because my net income per share forecast is $0.95 compared to TipRanks consensus of $1.43.

Most important is that my 2026 Adjusted Operating Cash Flow per share forecast of $7.33 is very close to TipRanks' consensus forecast of $7.29. < There is nothing that I see that justifies CRGY trading at ~1.2 X CFPS.

Adjusted Operating Cash Flow of approximately $2.4 billion compares to my capital expenditure WAG forecast of $1.2 billion. < I expect the Company to generate $1.0 to $1.2 billion of free cash flow in 2026. In addition, they are going to sell a lot of non-core assets that should generate $0.7 to $1.0 of sales proceeds early in 2026.

Bottomline: The Wall Street Gang is ALWAYS conservative on their price targets for companies involved in very large transactions like this merger of Vital into CRGY.
> All five of the most recent analysts rating the stock a BUY or STRONG BUY is a good sign. They see what I see, a large-cap that is going to generate a lot of free cash flow.
> BTW a lot of Post-merger production is now hedged, so the oil price risk has been reduced.
> "Special Situations" like this merger need to play out.
>> Step One is getting the merger closed.
>> Step Two is actual results for Q4 2025 and their 2026 guidance confirming my model assumptions. That should move the share price toward my valuation.
>> Step Three is a good 3rd party reserve report.
>> Step Four: It will probably take a full quarter of combined results (Q1 2026) before the analysts to justify using higher multiples to value the stock.
>> If oil prices do firm up in 2026, there is a lot of upside for CRGY.

My current valuation of $24.00 is based on 3.5 X annualized cash flow for 2025+2026.