Chord Energy: Wells Fargo Maintains Overweight, PT Raised to $143

Chord Energy: Wells Fargo Maintains Overweight, PT Raised to $143

Wells Fargo has raised its price target on Chord Energy Corp (NASDAQ:CHRD) to $143.00 from $142.00 while maintaining an Overweight rating on the stock. This positive move reflects the firm's strong outlook on Chord Energy's financial health and operational performance [1].

Chord Energy's stock appears undervalued, trading at an attractive P/E ratio of 6.96x with a healthy dividend yield of 6.24%. The company maintains a "GREAT" financial health score of 3.39 out of 5, indicating robust financial health. Wells Fargo expects Chord Energy’s oil production to grow modestly in Q2 2025, increasing 1% quarter-over-quarter, before remaining flat in Q3 and experiencing a typical seasonal decline in Q4 [1].

Wells Fargo projects Q2 2025 oil production of 155.0 mbbl/d and total production of 273.9 mboe/d, with capital expenditures estimated at $366 million. The firm anticipates Q2 2025 free cash flow of $119 million, down sequentially due to lower oil prices and capital timing. Chord Energy continues to advance its 4-mile lateral development program, with the first well brought online in February 2025 "performing well to date." Three additional 4-mile laterals have been drilled and are scheduled to come online in Q3 2025, with a total of seven planned through early 2026 [1].

At current strip pricing, Wells Fargo estimates Chord Energy will generate approximately $866 million and $588 million in free cash flow for fiscal years 2025 and 2026, respectively, with the company expected to continue returning about 100% of free cash flow through base dividends and share buybacks [1].

In other recent news, Chord Energy Corp reported its first-quarter 2025 earnings, with earnings per share (EPS) of $4.04, surpassing analyst expectations of $3.38. However, the company’s revenue fell short, generating $1.1 billion against a forecast of $1.16 billion. Piper Sandler adjusted its price target for Chord Energy to $159 from $161, maintaining an Overweight rating due to stronger production and reduced capital expenditure. UBS held its Buy rating with a $113 price target, projecting second-quarter adjusted EBITDA of $527 million, slightly below consensus estimates. Mizuho reiterated an Outperform rating with a $150 price target, noting Chord Energy’s commitment to its strategic plans and expected shareholder returns [1].

Based on the one-year price targets offered by 17 analysts, the average target price for Chord Energy Corp (CHRD, Financial) is $135.42 with a high estimate of $176.00 and a low estimate of $100.00. The average target implies an upside of 26.89% from the current price of $106.72. The average brokerage recommendation is currently 1.9, indicating "Outperform" status [2].

Chord Energy Corp (CHRD, Financial) delivered strong first-quarter results with oil volumes exceeding guidance and generating $291 million in adjusted free cash flow. The company maintained shareholder returns at 100% of free cash flow, repurchasing $216.5 million worth of shares and reducing its share count by approximately 9% since the Enerplus transaction. Chord Energy Corp (CHRD) has a low leverage ratio of 0.3 times, providing financial flexibility and a strong balance sheet compared to peers. The company is focusing on longer lateral wells, which are expected to reduce capital costs by 24% and improve economic returns. Chord Energy Corp (CHRD) has implemented cost-saving initiatives, reducing 2025 capital guidance by $30 million without impacting production targets [2].

The macroeconomic environment is challenging, with deteriorating pricing outlooks and increased volatility affecting the oil market. Chord Energy Corp (CHRD) anticipates a decline in oil production in the fourth quarter due to reduced activity levels. The decision to maintain one frac crew instead of reinstating a second could impact production volumes and capital expenditure expectations. There is uncertainty regarding the success of the 4-mile lateral program, as the company needs more data to confirm its effectiveness. Significant and rapid movements in oil prices create challenges for mergers and acquisitions, potentially impacting growth opportunities [2].

References:
[1] https://www.investing.com/news/analyst-ratings/wells-fargo-raises-chord-energy-stock-price-target-to-143-on-strong-outlook-93CH-4135186
[2] https://www.gurufocus.com/news/2976905/wells-fargo-increases-chord-energy-chrd-price-target-chrd-stock-news