Permian Resources (PR): Evaluating Valuation After 2025 Production Guidance Boost and Strong Quarterly Growth

Permian Resources (PR) caught investors’ attention after management raised its 2025 oil and total production targets, reflecting continued well performance. The guidance boost, which came alongside strong quarterly production growth, suggests management’s confidence in the company’s operational momentum.

See our latest analysis for Permian Resources.

After a rocky start to the year, Permian Resources’ 1-month share price return of nearly 11% is turning heads. This increase suggests that the production guidance hike and recent operational milestones are being met with renewed optimism. While the 1-year total shareholder return is still in the red at just under -5%, momentum has clearly improved in recent weeks as investors focus on the company’s growth outlook rather than short-term earnings dips.

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But with shares recently rebounding and the stock trading about 33% below the average analyst price target, is the market underestimating Permian Resources’ upside? Or has the company’s growth potential already been factored into the price?

Most Popular Narrative: 24.5% Undervalued

Permian Resources is trading well below the consensus fair value of $18.05 per share, compared to a recent close of $13.63. This sizable gap draws attention to the company’s future earnings and margin expansion, both key to the narrative’s outlook.

Recent optimization and expansions of transportation and marketing agreements are expected to allow Permian Resources to realize premium pricing for both crude and natural gas. This will increase exposure to key Gulf Coast and non-Waha hubs. These actions are anticipated to directly uplift revenues and free cash flow, with estimated $50 million higher free cash flow in 2026 (and further increases beyond 2026 as more volume is shifted).

Read the complete narrative.

Analyst growth forecasts pack a punch, with long-term earnings and revenue ramping higher. But what aggressive profit assumptions and margin goals are fueling this bold valuation? See for yourself which blockbuster projections separate this stock from the pack.

Result: Fair Value of $18.05 (UNDERVALUED)

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

However, ongoing volatility in oil prices and the capital needed to offset well decline rates could quickly shift Permian Resources’ growth outlook.

Find out about the key risks to this Permian Resources narrative.

Build Your Own Permian Resources Narrative

If you see the story a bit differently or want to dig into the numbers for yourself, you can build your own take on Permian Resources in just a few minutes. Do it your way

A great starting point for your Permian Resources research is our analysis highlighting 4 key rewards and 2 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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