Range Resources recently released its H1 and Q2-2024 earnings reports, showing a mixed performance. While revenues were below analysts’ expectations, earnings per share beat expectations at $0.46/share. Despite this, I believe that Range Resources is still a stock worth considering as a BUY. Currently trading at $31.4/share, the stock has shown stability over the last 52 weeks, with fluctuations between $27.6/share and $39.33/share. Although the stock is down 3% year-to-date, it is up 11% year-over-year.
In terms of production volumes, sales, and costs, Range Resources saw a decrease in total sales for H1-2024, mainly due to the impact of hedging and a drop in average realized prices. However, production volumes increased by 1.4% year-on-year, driven by natural gas and NGLs. Operating expenses declined by 10% compared to H1-2023, with net income positive at $120 M.
Cash flow from operations was positive at $480 M, while cash flow from investing activities was negative due to investments in natural gas properties. Range Resources also has a share buyback program in place, with authorization to buy back shares up to $1.1 bn. The company’s competitive advantages lie in its low operating costs and efficient operations, allowing it to generate positive free cash flow under different natural gas prices.
Looking ahead, the outlook for natural gas demand in the US is positive, with Range Resources well-positioned to take advantage of this growth. However, the company is exposed to commodity price risks, which it mitigates through hedging strategies. Despite these risks, I believe that Range Resources is a strong company with competitive advantages in the market.
Overall, I see Range Resources as a sound investment option for long-term investors who have a positive view of the US natural gas market. The current stock price, though not particularly low, presents an interesting entry point for those looking to capitalize on the company’s potential in the industry.