Matador Resources (NYSE: MTDR) faces headwinds in 2026, including weak oil prices and weakened market sentiment, but it remains a buy for long-term investors. This high-quality play on unconventional oil in West Texas and New Mexico continues to grow its business. It is expanding its acreage, proven reserves, operating wells, and production, generating positive cash flow and returning capital to shareholders. The key takeaway is that it is also improving quality, setting itself up for long-term success at current oil price levels and an accelerated earnings rebound if (when) oil prices recover.
Insider activity is among the numerous factors highlighting this company’s quality. Insiders own nearly 6% of the stock and have bought aggressively since the 2020 lows, when COVID-19 fears peaked and sent all stocks to historically low levels. While no purchases have been logged in 2026 as of late February, MarketBeat data shows they ramped up activity in 2025, reaching record levels in Q4 2025.
Matador Reports Strength in Q4 2026: Issues Strong Guidance for 2026
Matador posted solid results for Q4 2025, despite lower oil prices. The company generated nearly $850 million in net revenue, down 12.6%, which outpaced the consensus estimate by 475 basis points. Strength was seen in production volume, which increased year over year (YOY) and sequentially, and in midstream operations. The midstream operation is a critical factor, as it provides a regular cash dividend tied to volume rather than oil prices.
Margin news is also good. Operational execution supported positive cash flow on the production side, while midstream contributions were more robust than anticipated. The net result is 87 cents in adjusted earnings per share, down more than 50% YOY but 11 cents, or 1500 bps, better than expected, supporting healthy cash flow, capital returns, and balance sheet improvements.
Guidance supports both growth and capital returns. Matador forecasts 3% production growth and an 11% reduction in spending, which should provide room for dividends and share buybacks.
Matador's dividend is substantial, yielding about 3%, with shares in the high-$40s, and is reliable, accounting for 25% of the 2026 earnings forecast. The distribution is also likely to increase before year-end, as this company has issued seven increases over the past five years and has the capacity to do so again. Buybacks are also substantial, having reduced the count by 0.9% YOY in Q4, and are expected to continue.
Analysts and Institutions Cap Gains for MTDR in Early 2026
Analysts and institutional trends are bullish, but caution in early 2026 has capped the stock price action. Fifteen analysts tracked by MarketBeat rate the stock as a Moderate Buy with 73% Buy-side bias, but have been reducing their price targets. Recent targets put this market in the low end of the range, potentially as low as $47, which may also be the price floor; consensus assumes a 20% upside.
The greater risk is the institutions, which collectively own 92% of the stock and accumulated throughout 2025. However, selling in Q1 2026 is outpacing buying, presenting a headwind. If this persists, MTDR could struggle to hold current levels and may revisit recent lows.
Price action reflects the market headwinds. While a bottom is in force, the early-2026 rebound hit its ceiling below the mid-point of the long-term trading range, aligning with resistance near long-term exponential moving averages. That setup suggests this market is still under pressure, potentially moving down to the $40 level by midyear.
The question is whether institutions will revert to buying when shares hit critical levels or if price action falls to new lows. In that scenario, this stock could fall into the teens, but that is not anticipated. Trading at only 5X its 2030 earnings forecasts, this stock is deeply undervalued relative to its potential and needs only for management to execute the strategy for its price to rise. Catalysts in 2026 include Energy Transfer’s (NYSE: ET) soon-to-be-opened Hugh Brinson pipeline, which is expected to connect Matador Resources to the better-paying Henry Hub market.
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The article "Matador’s Results Were Better Than Feared, But 2026 Headwinds Still Matter" first appeared on MarketBeat.
