Crescent Energy: A Successful Example Of Divestitures And New Acquisitions
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Ignacio Zorzoli648 FollowersFollow5ShareSavePlay(14min)CommentsSummaryCrescent Energy is well-positioned after strategic asset divestitures and acquisitions across the Permian, Eagle Ford, and Uinta basins.CRGY improved EBITDA margins and reduced production breakevens, with adjusted OPEX per BOE dropping from $12.86 to $11.50.Relative valuation using P/E, EV/EBITDA, and P/CF against peers indicates significant upside potential for CRGY.I assign a STRONG BUY rating, supported by CRGY's strong financial metrics and advantageous industry positioning despite slightly higher net debt to EBITDA. grandriver/iStock via Getty Images Crescent Energy (CRGY) is an American company dedicated to the exploration and production of oil and gas in the United States. The company operates primarily in the Eagle Ford Basin in Texas and the UintaThis article was written byIgnacio Zorzoli648 FollowersFollowI am an individual investor with over 10 years of trading. I have been developing as a stock analyst for the last five years. I am inclined to search for Value companies, mainly linked to the production of commodities. I mainly focus on companies that show sustained free cash flows over time, low levels of leverage, sustainable debt over time, that are going through some stage of distress but with high recovery potential. I prefer to analyze companies and sectors that are not widely taken into account by the market like oil&gas, metals, minery and and companies operating in jurisdictions outside the United States, as an opportunity to find value. In that sense, I focus on companies that are developed in emerging markets, that show high margins and present good investment opportunities in the medium and long term. I am interested in companies with a solid pro-shareholder attitude, that maintain solid and sustained buyback programs over time or dividend distribution.I finished my financial master degree with a specialization in company valuation. I vave an economic degree too. One of my main motivations is to share information about companies with the seeking alpha community of investors and add value to the individual decisions of readers. I am not a financial advisor. I maintain a friendship with another author of the page, Eliseo Bottini Antunes. This is not based on any business or commercial connection between the two. We each cover different sectors and companies with different points of view and opinions. All articles are my opinion - they are not suggestions to buy or sell any securitiesAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsHow do Crescent Energy's recent asset sales impact its profitability outlook?By divesting non-core and less profitable assets, CRGY improved EBITDA margins and lowered production breakevens, enhancing overall profitability and operational efficiency.What does the peer multiple valuation suggest about CRGY's upside?Valuation using weighted peer multiples—particularly EV/EBITDA—shows CRGY has compelling upside potential relative to comparable U.S. oil and gas companies.Are there any financial risks highlighted for CRGY compared to peers?CRGY's net debt to EBITDA is higher than the peer average, which warrants monitoring, but its EBITDA margin and growth metrics remain superior.Recommended For You