UBS Maintains Buy Rating on Gulfport Energy, PT Down to $227.

UBS Maintains Buy Rating on Gulfport Energy, PT Down to $227.

UBS has maintained its Buy rating on Gulfport Energy (GPOR) despite a downward revision in its price target to $227. The investment bank cited the company's strong balance sheet, free cash flow orientation, and strategic focus on natural gas production as reasons for its continued bullish stance. The revision in the price target reflects a more cautious outlook on the natural gas market, where prices have been volatile due to strong inventory levels and resilient supply.

Gulfport Energy operates primarily in the Utica Shale in Ohio and the SCOOP play in Oklahoma, with over 90% of its production being natural gas. The company has emerged from bankruptcy with a stronger balance sheet and a free cash flow-oriented strategy, which aligns with ESG-focused investor expectations. UBS expects Gulfport Energy's earnings per share to surge by 46.7% year-over-year in 2025, driven by its strategic focus on natural gas production and free cash flow generation.

The recent revision in the price target comes amidst a period of uncertainty in the natural gas market. The U.S. Energy Department's latest inventory report showed a higher-than-expected increase in natural gas supplies, putting pressure on natural gas futures. However, longer-term forecasts suggest tightening balances and higher prices into 2026. The EIA expects natural gas inventories to fall closer to the five-year mean as the year progresses, tightening balances into the winter heating season.

Despite the market volatility, UBS maintains its Buy rating on Gulfport Energy, citing the company's strong fundamentals and strategic positioning in the natural gas market. The investment bank expects the company to continue generating strong free cash flow and reducing its debt, which should benefit its stock price in the long run.

References:
[1] https://finance.yahoo.com/news/u-natural-gas-futures-extend-130900604.html