Benchmark upgraded its rating for Antero Resources (AR.US) from "Hold" to "Buy," setting a price target of $44. The firm noted that the stock has significantly underperformed other oil and gas producers due to declining natural gas prices from recent highs, driven by robust supply. Benchmark analyst Subash Chandra did not confirm that natural gas prices have bottomed but expressed increasing optimism regarding natural gas exporters. He highlighted that the United States is the world's third-largest exporter of propane, following Qatar and the UAE, both of which are currently situated in conflict zones. As a stable supplier, U.S. exporters are positioned to benefit from the disruptions caused by the Iran conflict. Although the proportion of natural gas liquids (NGL) in Antero's operations decreased following the acquisition of HG Energy II, Chandra stated that the company remains the largest publicly traded NGL exporter. He added that, given Antero's access to LNG corridors, its dry gas business should achieve lower break-even costs without sacrificing basis differentials. Separately, Chandra downgraded Talos Energy (TALO.US) from "Buy" to "Hold." Despite strong performance expected in 2025, the company's guidance for fiscal year 2026 fell short of expectations. He noted that while the 2026 drilling plan is "dynamic and meaningful," cyclical challenges to base production persist. The analyst also downgraded Diamondback Energy (FANG.US) and Permian Resources (PR.US) from "Buy" to "Hold," citing valuation concerns.
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