Granite Ridge Resources (GRNT – Research Report), the Energy sector company, was revisited by a Wall Street analyst yesterday. Analyst Noah Hungness from Bank of America Securities reiterated a Hold rating on the stock and has a $7.00 price target.
Noah Hungness’s rating is based on a combination of factors that reflect both potential growth and existing challenges for Granite Ridge Resources. The company has shown promising production growth, with expectations of a 17.9% increase year over year in overall production and an 18.3% rise in oil production specifically. This growth is supported by significant capital expenditures in 2024, which are expected to result in a plateau of production levels after an initial surge.
Despite these positive aspects, Hungness maintains a Hold rating due to concerns about the company’s financial outlook and ownership structure. The guidance for 2025 indicates that while Granite Ridge Resources is positioned for peer-leading growth, it is also projected to generate negative free cash flow. Additionally, the substantial equity stake held by Grey Rock, which owns approximately 50% of the company, creates an overhang that could impact stock performance. These factors contribute to a cautious approach, justifying the Hold rating.
Hungness covers the Energy sector, focusing on stocks such as Northern Oil And Gas, Vital Energy, and Kimbell Royalty Partners. According to TipRanks, Hungness has an average return of -1.3% and a 31.25% success rate on recommended stocks.
In another report released on February 21, Capital One Financial also downgraded the stock to a Hold with a $7.00 price target.