Wolfe Research Slightly Raises Coterra Energy Price Target

Wolfe Research analysts increased their price target for Coterra Energy (NYSE:CTRA) to $32 from $31, maintaining an Outperform rating on the stock. The revision reflects optimism surrounding Coterra’s recent acquisitions and potential for improved performance relative to the energy sector.

Year-to-date, Coterra has underperformed the Russell 3000 Energy Index by approximately 10%, partly due to market speculation about a possible acquisition in the Anadarko Basin. However, the company’s recent bolt-on acquisitions in the Permian Basin appear to have quelled those rumors. These transactions have strengthened its drilling inventory in New Mexico, positioning Coterra to capitalize on operational efficiencies and bolster its performance.

Wolfe Research anticipates that Coterra’s updated three-year outlook, expected with its year-end results, could serve as a catalyst for resetting medium-term free cash flow growth expectations.

Wolfe’s base case scenario, which assumes long-term prices of $65 WTI and $4.00 Henry Hub gas with an 8% cost of capital, suggests potential value upside for the company. As Coterra integrates its newly acquired assets and begins to execute on operational efficiencies, the outlook for its relative performance appears increasingly favorable.