Chord Energy (CHRD): Evaluating Its Valuation After Weaker Q2 Earnings and New 2025 Outlook

Chord Energy (CHRD) recently made headlines after a 2.6% drop in its share price, driven by second-quarter earnings that missed expectations. The primary factors were lower realized prices for oil and natural gas, paired with higher operating expenses, even as production volumes increased. The company also reported a $539 million goodwill impairment, which can be a challenge for investors to absorb. However, management offered some stability with its 2025 guidance, anticipating steady output and adjusted EBITDA of $2.4 billion.

Looking at the larger context, Chord Energy’s stock has underperformed this year. It is down about 11% year-to-date and has declined by 27% over the past twelve months, despite a 16% increase in the past three months. The market’s response suggests a shift in how investors view the company’s risk profile. Recent earnings challenges are now a focus, while last year’s operational momentum appears to have diminished. The latest guidance provides some reassurance, but sentiment remains cautious following the earnings release.

After a turbulent year and a sharp drop following earnings, questions remain about whether Chord Energy is undervalued at current levels or if the market is preparing for continued challenges.

Most Popular Narrative: 21% Undervalued

According to the community narrative, Chord Energy appears significantly undervalued based on analyst consensus and future projections. This assessment is driven by expectations of stronger profit margins, lower costs, and disciplined capital management, suggesting the company's fair value is well above its current price.

Strong execution of longer-lateral (4-mile) drilling, with early results significantly outperforming expectations, positions Chord to lower breakeven costs and increase access to previously marginal acreage. This enables volume growth with reduced capital intensity and drives higher net margins and free cash flow in the coming years. Rapid adoption of artificial intelligence, machine learning, and advanced analytics across operational workflows is already yielding notable gains in capital and operating efficiency. These advancements are expected to further reduce per-barrel production costs, directly supporting improved net margins and long-term profitability.

What is the secret recipe behind Chord Energy’s bold valuation? This narrative hints at breakthrough technologies along with a dramatic profit margin turnaround, backed by eye-opening growth projections. Interested in discovering what assumptions power that analyst price target? The real numbers driving this valuation might surprise you.

Result: Fair Value of $134.07 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, concentrated exposure to the Williston Basin and stricter regulatory pressures could hinder long-term growth and create challenges for the bullish profit margin outlook.

Find out about the key risks to this Chord Energy narrative.

Another View: What About Cash Flows?

Beyond analyst price targets, our DCF model takes a different approach by focusing on future cash flows. This method points to a starkly different valuation and suggests the company is trading well below its fair value. Which perspective truly captures the opportunity?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Chord Energy for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Chord Energy Narrative

If you want to challenge these views or prefer hands-on analysis, you can explore the numbers and form your own perspective in just a few minutes. do it your way.

A great starting point for your Chord Energy research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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