Kodiak Gas Services Inc (KGS) PT Raised to $35 at Stifel

Stifel analyst Selman Akyol raised the price target on Kodiak Gas Services Inc (NYSE: KGS) to $35.00 (from $31.00) while maintaining a Buy rating.

The analyst comments "Kodiak Gas Services posted 2Q24 results in line with our estimates and less than 1% below the Street and yet the stock sold off about 10% in today's trading. We view the stock pullback as an attractive entry point (6% yield) and we attribute it to either lower gross margins or utilization, which neither should have come as a surprise. Despite the sell off, the company remains quite pleased with its early result from its acquisition of CSI Compressco and is working to integrate the assets as well as monetize lower performing compression units. Along that front they have entered into an agreement to sell some lower HP units, and we think this will create noise in the revenue/hp metric. Longer term KGS believes investors are underestimating the demand and the durability of the compression growth cycle. We are maintaining our Buy and raising our target to $35.00 from $31.00."

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