Permian Resources stock rating reiterated at Buy by UBS on improving FCF

Investing.com

Published Jul 14, 2025 10:40AM ET

Permian Resources stock rating reiterated at Buy by UBS on improving FCF

Investing.com - UBS has reiterated its Buy rating and $16.00 price target on Permian Resources Corp (NYSE:PR) ahead of the company's second-quarter 2025 earnings report, due July 30. According to InvestingPro data, the stock appears undervalued, with analyst targets ranging from $14 to $23.

The oil and gas producer has underperformed its small and mid-cap exploration and production peers despite the rebound in crude oil prices at the end of the second quarter of 2025. This comes despite strong fundamentals, with revenue growth of 37% and an impressive financial health score of "GREAT" on InvestingPro .

UBS sees Permian Resources' improving free cash flow generation and leading capital efficiency as catalysts that could drive outperformance in the stock.

The investment bank believes the company's recent acquisition of APA's New Mexico assets will strengthen near-term capital efficiency for the Delaware Basin operator.

UBS also points to Permian Resources' growing royalties assets as a potential longer-term catalyst as the company continues to expand its scale in the Delaware Basin. Unlock more insights about PR's growth potential with InvestingPro , featuring 8 additional ProTips and comprehensive financial analysis.

In other recent news, Permian Resources Corp. reported strong first-quarter earnings for 2025, surpassing analysts' expectations with an EPS of $0.44, compared to a forecast of $0.42. The company's revenue also exceeded projections, reaching $1.38 billion against the anticipated $1.37 billion. In addition to its earnings results, Permian Resources announced the acquisition of New Mexico assets from APA for $608 million, which includes approximately 12,000 barrels of oil equivalent per day and more than 100 gross two-mile drilling locations. The acquisition is expected to enhance the company's asset base and provide strategic benefits due to low breakeven costs and anticipated free cash flow accretion.

Analyst firms have been active in updating their outlooks on Permian Resources. Citi raised its price target to $17.00 from $15.00, maintaining a Buy rating, while RBC Capital Markets also increased its target to $17.00 from $16.00, keeping an Outperform rating. Piper Sandler reiterated its Overweight rating with a $19.00 price target, highlighting Permian Resources as one of its favorite names in the exploration and production sector. The company also held its annual shareholder meeting, where shareholders approved the election of board directors, executive compensation, and the appointment of KPMG LLP as the independent auditor for the upcoming fiscal year. These developments underscore Permian Resources' ongoing strategic initiatives and operational improvements, which have been recognized by multiple analyst firms.

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