Matador Resources Gets Buy Rating, 56% Upside Seen

Matador Resources, an independent energy company operating in the United States, has recently been assigned a "buy" rating by Bank of America, with a target price of $56 per share. This marks the first time the bank has covered the company, reflecting a positive outlook on its future prospects. The analysts at Bank of America cited several reasons for their optimism, including the company's exploration and production assets, which are profitable within a WTI price range of $37 to $43 per barrel. Additionally, Matador Resources' stock buyback program, expansion into midstream operations, and potential for external growth were highlighted as key factors contributing to its positive outlook.

Noah Hungness, an analyst at Bank of America, praised Matador Resources for its flexibility and strong execution capabilities. He noted that the company's impressive 21.7% revenue growth over the past 12 months demonstrates its ability to adapt to changing market conditions. Furthermore, Matador Resources has announced plans to reduce its drilling rig count from 9 to 8 by mid-year, in response to the recent oil price decline and uncertain demand outlook. This strategic move is expected to save approximately $100 million in capital expenditures and generate an additional $71 million in free cash flow at a WTI oil price of $60 per barrel.

Matador Resources focuses on the exploration, development, production, and acquisition of oil and natural gas resources, with a particular emphasis on shale and other unconventional reserves. The company's strong first-quarter performance for 2025 further supports the positive outlook. Matador Resources reported a year-over-year revenue increase of over 28%, reaching approximately $1 billion, which exceeded market expectations. Additionally, the company's adjusted earnings per share of $0.99 also surpassed analyst estimates.