Benchmark Sees Midstream Monetization Unlocking Value for Matador Resources (MTDR)

Matador Resources Company (NYSE:MTDR) ranks among the stocks with the lowest forward PE ratios. On January 21, Benchmark retained its Buy rating on Matador Resources Company (NYSE:MTDR) with a $62 price target, although lowering its fourth-quarter EBITDA projection. The firm cut its EBITDA outlook to $494 million from $571 million, noting weaker mark-to-market commodities and pricing disparities. On the other hand, Benchmark boosted its output and capital expenditure forecasts in response to faster cycle times that surpassed the upper limit of projections.

As Five Point, a private equity partner, chooses to hold onto a 49% ownership in Matador Resources Company (NYSE:MTDR), Benchmark anticipates a midstream monetization this year. The net proceeds would be used to finance future expansion and lower borrowings on the San Mateo revolver.

According to Benchmark, the current setup, which assigns an upstream multiple to almost $300 million of midstream EBITDA, would be more competitive compared to a higher-multiple midstream structure.

Matador Resources Company (NYSE:MTDR) is an independent U.S. energy firm that explores, develops, produces, and acquires oil and natural gas, primarily in the Delaware Basin, Wolfcamp, and Bone Spring plays.

READ NEXT: 10 Best Magic Formula Stocks for 2025 and 10 Best Retirement Stocks to Buy According to Hedge Funds.

Disclosure: None. This article is originally published at Insider Monkey.