Gulfport Energy

Aug 16, 2023

ssuaphoto/iStock via Getty Images Pioneer Natural Resources (NYSE: PXD ), Gulfport Energy (NYSE: GPOR ) and SM Energy (NYSE: SM ) are all upgraded to Overweight from Neutral at J.P. Morgan, seeing a better risk/reward position for the shale-levered stocks over the next 6-12 months given better cash return yields amid the higher commodity price environment. JPM analysts led by Arun Jayaram believe Pioneer Natural ( PXD ) can deliver nearly 5% oil growth at flat capex in 2024, with potential upside if the company can sustain productivity at 2023 levels. Gulfport ( GPOR ) screens as one of the cheapest stocks in JPM's coverage group, and the bank is impressed with the early operational success of the new management team that has focused on driving costs lower and improving efficiencies. SM Energy ( SM ) has shown positive operational trends, such as well strong well productivity, that JPM said should last through H2 2023 and beyond, as declining H2 spending and rising volumes should drive higher cash returns to support continued outperformance. Jayaram also downgraded Chesapeake Energy ( CHK ) to Neutral from Overweight on valuation, as the stock is among the most expensive of the natural gas-focused E&Ps.