Vista Energy is Monday's IBD Stock Of The Day, as the Latin American oil and gas producer moved above a buy point even as U.S. and international oil prices remain stunted.
The Mexico-based company focuses on oil production, which tends to have better economics than natural gas. It has substantial exposure to Argentina's Vaca Muerta field, the largest shale oil and gas play under development outside North America. Vista Energy has a strong project pipeline, according to analysts, with a current inventory of 1,150 wells.
Since posting consecutive annual losses in 2019 and 2020, Vista Energy has seen yearly profit grow more than 900%, from 40 cents per share in 2021 to $4.17 per share in 2023. Analyst consensus has 2024 EPS totaling $5.36 and growing another 90% to $8.11 by 2026, according to FactSet.
Vista Energy shares have their primary list on the Mexican Stock Exchange. They trade as American depositary receipts, or ADRs, on the New York Stock Exchange.
Last week, Bank of America dropped its VIST price target to 68, down from 70, as the firm lowered its 2025 Brent forecast to $75 per barrel from its previous view of $80 per barrel. Bank of America in late August initiated coverage of VIST with a buy rating and a price target of 70, pointing to the company's presence in Vaca Muerta as a major positive.
Meanwhile, JPMorgan analyst Rodolfo Angele on Aug. 2o also initiated coverage of Vista Energy with an overweight rating and 68 price target.
U.S. oil prices fell less than 1% Monday to around $70.68 per barrel. Meanwhile, Brent futures, the international benchmark, declined about 0.5% to $74.14 per barrel.
Both U.S. and Brent oil prices are down nearly 20% in 2024 and have declined more than 8% in September.
U.S. natural gas prices on Monday traded around $2.59 per British thermal unit, down 22% in 2024 but up more than 20% on the month.
Vista Energy Stock Performance
VIST ADRs edged up 0.3% to 47.54, hitting 49.60 intraday, during market trade on Monday. The stock rebounded off its 50-day moving average, moving above a 48.17 buy point, the high from Sept. 16, according to MarketSurge chart analysis.
Vista Energy stock is down 7% in September after a nearly 16% gain in August. To date in 2024, Vista Energy has surged 64% even as the broader IBD tracked Oil & Gas – International Exploration & Production industry group has declined around 9%.
For comparison, ConocoPhillips has declined 5% while Warren Buffett-backed Occidental Petroleum has fallen 12% in 2024. Vista Energy is also outperforming Exxon Mobil and Chevron this year. XOM has advanced 18% while CVX is trading nearly flat.
On Sunday, Morgan Stanley analyst Bruno Montanari raised the firm's VIST target price to 74, up from the previous 53. This represents 53% upside compared to current trading levels.
The analyst said the company is Morgan Stanley's "favorite stock to play Argentina energy."
Montanari forecasts that production could grow around 60% in 2025 and 75% in 2026 compared to current production levels.
"The main risk associated with Vista's short- to medium-term growth lies in the oil evacuation infrastructure," the analyst wrote. "Vista has contingency plans to deal with new delays by increasing its trucking utilization."
"Oil prices and negative macro-political developments are also risk, although not specific to Vista," Montanari added.
Vista Energy stock has a 91 Composite Rating out of a best-possible 99. The stock also has a 91 Relative Strength Rating and a 91 EPS Rating.
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