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Why Newfield Could Thrive During The Current Downturn In Oil

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Williams Capital initiated coverage on Newfield Exploration Co. (NYSE: NFX) with Buy Rating and $58 price target.

The analysts believe the company will thrive through the current downturn, given its strong balance sheet (2.1x net debt/EBITDA at YE16), ample financial liquidity (around $2.4 billion, pro forma for equity) and a strong hedge book.

"However, considering its tremendous stacked-pay resource potential in the Anadarko Basin, we believe shares deserve a aluation closer to the Permian Basin players," wrote the analysts, adding they expect the valuation gap to narrow as the company moves towards development mode, with improving capital efficiencies.

The $58 price target implies 2017 and 2018 EV/EBITDA metrics of 11.6x and 7.5x, respectively.

Latest Ratings for NFX

DateFirmActionFromTo
Dec 2018DowngradesBuyNeutral
Nov 2018MaintainsEqual-WeightEqual-Weight
Nov 2018MaintainsEqual-WeightEqual-Weight

View More Analyst Ratings for NFX
View the Latest Analyst Ratings

Posted-In: Williams CapitalAnalyst Color Initiation Analyst Ratings

 

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