JPMorgan Starts Talos Energy (TALO) at Neutral

JPMorgan analyst Arun Jayaram initiates coverage on Talos Energy (NYSE: TALO) with a Neutral rating and a price target of $12.00.

The analyst comments "JPM View: We initiate coverage of Talos Energy (TALO) with a Neutral rating and a Dec-25 PT of $12/sh. TALO is a SMid Cap E&P with a concentrated position in the U.S. Gulf of Mexico and offshore Mexico. The company’s business model employs a capital light subsea tie-back strategy, concentrating its exploitation/exploration efforts around existing infrastructure, which allows for better economics and shorter cycle times relative to greenfield projects. TALO also has been an active participant in M&A, most recently announcing the acquisition of QuarterNorth Energy for $1.29 billion in January of 2024, adding significant deepwater assets, and increasing production by ~30 MBoe/d to ~95 MBoe/d. While we are fans of the business model, our Neutral stance on the stock is primarily due to our cautious outlook on oil fundamentals, which supports our below consensus forecasts given the company’s high oil torque (~71% mix). In addition, we think the stock could mirror the performance of our broader E&P coverage until a permanent CEO is named by the company."

For an analyst ratings summary and ratings history on Talos Energy click here. For more ratings news on Talos Energy click here.

Shares of Talos Energy closed at $10.62 yesterday.

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