J.P. Morgan analyst Zach Parham shared his view on Magnolia Oil & Gas Corporation ( MGY ) ahead of the earnings release on May 1st.

The analyst maintained a Neutral rating on the stock with a price forecast of $24 after updating for first-quarter commodity prices.

Parham writes that Magnolia Oil & Gas ( MGY ) remains on track with its 2-rig/1-frac crew program and is committed to keeping capex below 55% of EBITDA.

Despite commodity price volatility, the analyst expects capital expenditure to stay under 50% of EBITDA due to MGY’s natural gas exposure.

Also, Parham sees positive productivity trends in Giddings and Karnes wells, which could provide a modest production upside to his production estimates.

For FY25, the analyst estimates total volumes of 96.1 MBoe/d (+7% YoY) and oil volumes of 39.4 MBo/d (+3% YoY), aligning with company guidance.

Also, Parham sees FY25 capex of $478 million (in line with consensus) and FCF of $458 million.

Meanwhile, for the first quarter, the analyst expects cash flow per share (CFPS) to be $1.20 and EBITDA to be $251 million (3% above the estimates at $244 million).

The analyst projects first-quarter oil production of 39.0 MBo/d and total production of 94.0 MBoe/d (both on top of consensus).

Moreover, Parham sees a cash return of $77 million for the quarter, including a dividend per share of $0.15 and a share buyback of $48 million.

Price Action: MGY shares are down 10.9% at $20.94 at the last check Friday.

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