KeyBanc Downgrades Magnolia Oil & Gas Corp. (MGY) to Sector Weight, 'Valuation and Asset-Level Opacity Concern Us'

KeyBanc analyst Tim Revzan downgraded Magnolia Oil & Gas Corp. (NYSE: MGY) from Overweight to Sector Weight.

The analyst comments "Rich valuations and poor visibility into core assets lead us to downgrade MGY to SW. We have been supportive of Magnolia's growth and reinvestment strategy since its 2018 de-SPAC. But we are now 5+ years from that event and weary of management's reticence to provide meaningful details on the Giddings asset. We have no details on delineated acreage or inventory. Recent client conversations suggest management's "focus on our financials" disclosure strategy has run its course. In Giddings, we see encouraging well results and variability. The lack of details makes the current rich valuation vs. peers appear unsustainable. At a 5.3x 2024E EV/EBITDA multiple, MGY shares trade a turn or more above high-quality mid-caps. In the absence of material Giddings data, we err on the side of caution and downgrade MGY shares."

For an analyst ratings summary and ratings history on Magnolia Oil & Gas Corp. click here. For more ratings news on Magnolia Oil & Gas Corp. click here.

Shares of Magnolia Oil & Gas Corp. closed at $23.20 yesterday.

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