A Look At Permian Resources (PR) Valuation As Fresh Analyst Coverage Fuels Investor Interest

Recent analyst coverage on Permian Resources (PR) has picked up, with several firms updating their views and pointing to the company’s post merger execution and its focus on oil and gas development in the Permian Basin.

See our latest analysis for Permian Resources.

At a recent share price of US$20.66, Permian Resources has seen a 47.26% 90 day share price return and a 94.90% one year total shareholder return. This suggests momentum has been building as investors react to analyst attention and its post merger execution story.

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With PR trading at US$20.66, sitting below the average analyst price target and showing a very large intrinsic value gap, the key question is whether this is a genuine mispricing or whether the market is already factoring in future growth.

Most Popular Narrative: 17.4% Undervalued

According to one widely followed narrative, Permian Resources has a fair value of $25.00 per share versus the last close at $20.66, framing a meaningful valuation gap that leans on low cost production, inventory depth and capital discipline.

Best-in-class Delaware Basin LOE ($5.26/Boe) and rapidly declining D&C costs (~$700/ft) create a cost-of-production moat against higher-cost peers.

Read the complete narrative. Read the complete narrative.

Curious what kind of production runway, margin profile and capital return mix would need to line up to support that $25.00 fair value on PR at a single digit discount rate, according to MRT23.

Result: Fair Value of $25.00 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, this hinges heavily on oil prices and single basin exposure, where weaker WTI or regional policy shifts could quickly challenge the current undervaluation story.

Find out about the key risks to this Permian Resources narrative.

Next Steps

Given the mix of optimism and concern in this story, it makes sense to review the numbers yourself and decide how the trade off sits for you, then use the 2 key rewards and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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