RRC: LNG-Driven Gas Demand Is Expected To Support Higher Future Pricing

Analysts have nudged their blended fair value estimate for Range Resources slightly higher to around $41.91 from approximately $41.79, reflecting incremental improvements in long term margin expectations and valuation multiples, even as near term gas macro headwinds and modestly softer growth assumptions temper upside.

Analyst Commentary

Recent Street research on Range Resources reflects a balanced mix of optimism about the company’s long term positioning in U.S. natural gas and caution around nearer term commodity and cash flow dynamics. Target price revisions have clustered in the high 30 dollar to mid 40 dollar range, broadly consistent with the updated blended fair value estimate, as analysts recalibrate models following Q3 updates and evolving gas macro assumptions.

Across the coverage universe, views coalesce around Range’s operational execution, capital discipline, and exposure to potential structural tailwinds in gas demand, while differing mainly on how quickly these positives will translate into higher free cash flow and sustained multiple expansion.

Bullish Takeaways

• Bullish analysts see Range as a prime beneficiary of a potential structural uplift in U.S. gas pricing over the next decade, driven by LNG export growth and accelerating power demand from data centers. This is seen as supporting higher long term price floors and reduced earnings volatility.
• Production is viewed as being on a credible path toward the 2.6 Bcfe per day 2027 target. This reinforces confidence in the company’s ability to deliver steady volume growth that underpins cash flow and supports the current valuation framework.
• Some bullish analysts highlight the upside from capital allocation flexibility, including stock buybacks and growth optionality. These are viewed as potential drivers of additional shareholder value if management leans into favorable market conditions.
• Incremental improvements in cost efficiencies and operational execution, alongside generally clean Q3 operational updates, are seen as supportive of margin expansion. This is cited as justification for maintaining or modestly increasing target prices despite near term macro noise.

Bearish Takeaways

• Bearish analysts argue that the recent rally in gas equities has extended beyond fundamentals, limiting near term upside as valuation multiples already discount a more constructive gas tape than currently realized.
• There is concern that weaker near term gas and NGL realizations will keep cash flow below consensus. This could constrain the pace of deleveraging, buybacks, or incremental growth investments that would otherwise support a higher fair value.
• Some cautious views emphasize that while the gas outlook is robust on a multi year basis, visibility around timing remains uncertain. This leaves Range exposed to prolonged price softness that could delay the realization of its growth and margin targets.
• Target price cuts in the high 30 dollar to low 40 dollar range reflect a belief among bearish analysts that current valuations already capture much of the anticipated structural demand uplift. As a result, they see less room for re rating without a clearer inflection in macro conditions.

What's in the News

• Wells Fargo assumed coverage on Range Resources with an Overweight rating and a $46 price target, citing expectations for a structurally higher U.S. gas price floor supported by LNG exports and rising datacenter power demand (Periodicals).
• Range reported third quarter 2025 production of 204.96 million mcfe per day, up slightly year over year as higher natural gas volumes offset modest declines in NGLs and oil (Key Developments).
• The company repurchased 1.58 million shares, or 0.66 percent of shares outstanding, in the third quarter of 2025, bringing total buybacks under its 2019 authorization to 31.63 million shares, or 12.85 percent (Key Developments).
• Range modestly increased its 2025 production guidance to approximately 2.23 Bcfe per day, slightly above its prior outlook of about 2.225 Bcfe per day (Key Developments).

Valuation Changes

• The Fair Value Estimate has risen slightly to approximately $41.91 from about $41.79, reflecting a modest upward revision in the long term outlook.
• The Discount Rate has increased marginally to roughly 6.96 percent from about 6.90 percent, indicating a slightly higher required return in the valuation framework.
• Revenue Growth has eased slightly to around 11.86 percent from about 12.07 percent, incorporating somewhat softer forward growth assumptions.
• The Net Profit Margin has improved modestly to roughly 20.50 percent from about 20.43 percent, suggesting a small enhancement in long term margin expectations.
• The Future P/E has edged higher to approximately 13.84x from about 13.75x, implying a slightly richer multiple applied to projected earnings.