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On Friday, Trust Securities updated its outlook on Riley Exploration Permian (NYSE:REPX) and raised its price target to $53.00 from $50.00. The firm maintained its “buy” rating on the oil and gas company's stock.
The target price adjustment comes after Riley Exploration Permian demonstrated its unique ability to increase production by more than 10% this year while simultaneously reducing capital expenditures (CAPEX) by more than 10%. Trust Securities expects the company to continue executing a consistent operating program with a focus on the same regions as in recent quarters.
According to analysts at Trust Securities, free cash flow (FCF) is expected to increase significantly year-over-year (YOY) due to operational and capital efficiencies in this year's program. The FCF generated is expected to be used for further shareholder returns and debt repayments.
The company's expectation of similar performance next year was an important factor in the decision to raise the target price. The new price target of $53.00 per share reflects positive expectations for Riley Exploration Permian's financial and operational trajectory.
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