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On Thursday, Mizuho Securities exhibited confidence in SilverBow Energy (NYSE:SBOW), increasing the stock’s price target to $42 from $40 while sustaining a Buy rating. The adjustment comes as the firm updates its Net Asset Value (NAV) model to incorporate year-end 2023 reserves and the company’s guidance for 2024.
SilverBow Energy recently announced a reduction in its 2024 capital expenditure guidance by approximately 15% due to declining gas prices. This move is part of the company’s strategy to underscore its dedication to capital discipline and reducing debt. In line with this, SilverBow Energy anticipates directing about 80% of its 2024 spending towards oil and liquids assets, aiming to adhere to its long-term leverage goal of 1.0x Net Debt to EBITDA ratio.
The backdrop to these financial strategies is a growing proxy battle with Kimmeridge, an investment firm. Kimmeridge has escalated the confrontation by nominating candidates for three board seats in the upcoming election scheduled for May. Furthermore, Kimmeridge has proposed a merger, which was announced yesterday, with a follow-up call set for today.
Mizuho’s revised price target represents a 5% increase from the previous target, reflecting a positive outlook on SilverBow Energy’s financial adjustments and strategic focus.
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