KeyBanc: 'We Expect Crescent Energy (CRGY) Shares to Respond Favorably'

KeyBanc analyst Tim Rezvan reiterated an Overweight rating on Crescent Energy (NYSE: CRGY).

The analyst commented: "Strong 2Q Beat and More Efficient 2025 Outlook; We expect CRGY shares to respond favorably to strong drill-bit and financial execution in 2Q. Operationally, the Company provided bullish updates on well costs per foot in the Eagle Ford Shale (-15% vs. 2024) and in the Uinta Basin (-12.5% vs. 2024), in the context of widespread drilling efficiencies in the Eagle Ford and strong delineation well results in the Uinta. These efficiencies underpin the 3% reduction in the 2025 capital budget, while production guidance is unchanged. We have maintained a "baby with the bath water" view on the YTD price action for CRGY shares (-39%, vs. XOP -6%). While leverage remains at 1.5x, net debt did decline by $220M q/q. We see a lowdecline PDP base that results in lower capital intensity to remain flat, and we continue to expect more asset sales this year to get to/above management's guide of at least $250M. In addition, we see no risk to the base dividend of $0.48/share, which implies a 5.4% yield today. Unlike small-cap peers with deeper balance sheet challenges, we see ample optionality for Crescent to continue reducing debt, either through conventional Rockies assets or through minerals assets it owns that we believe are not reflected in the share price. As we look to the back half of 2025, we see accretive asset sales as an important driver of accreting value from debt to equity for Crescent, in addition to organic FCF generation from a more efficient South Texas drilling program."

For an analyst ratings summary and ratings history on Crescent Energy click here. For more ratings news on Crescent Energy click here.

Shares of Crescent Energy closed at $8.88 yesterday.

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