Comstock Resources: Hold Rating Justified by Cautious Production Outlook and Increased Capital Expenditure

Analyst Gabriele Sorbara of Siebert Williams Shank & Co reiterated a Hold rating on Comstock Resources (CRK – Research Report), retaining the price target of $7.00.

Gabriele Sorbara has given his Hold rating due to a combination of factors concerning Comstock Resources’s recent guidance and capital expenditure plans. Sorbara notes that the company’s production guidance for the second quarter of 2024 is slightly below expectations, which could be a cause for concern regarding growth prospects. Additionally, while the capital expenditure for drilling and completion is reaffirmed to be between $750 million and $850 million, there is an increase in capital expenditure due to first-quarter acreage spending that may pressure financials in the near term.

The reaffirmation of the 2024 total production forecast is consistent with the consensus, indicating a steady operational outlook; however, the cautious guidance on near-term production and higher capital outlays could limit upside potential and warrants a more neutral stance. Hence, Sorbara’s Hold rating suggests that while the company’s long-term prospects remain intact, there are immediate challenges that may impede stock performance, leading to a recommendation for investors to maintain their positions without further accumulation at this time.

In another report released on April 19, Piper Sandler also assigned a Hold rating to the stock with a $8.00 price target.

Based on the recent corporate insider activity of 53 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CRK in relation to earlier this year.

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Comstock Resources (CRK) Company Description:

Comstock Resources, Inc. engages in the acquisition, development, and exploration of oil and natural gas. It focuses primarily on properties located in Texas and Louisiana. The company was founded in 1919 and is headquartered in Frisco, TX.