JP Morgan expects to upgrade FCF with conservative guidance in 2025, upgrade Talos Energy Plating targets – Talos Energy (NYSE: TALO)

JP Morgan Analyst Arun Jayaram raises price forecast Talos Energy, Inc. Talo From $13.00 to $14.00, while retaining neutral ratings.

Last month, the company reported adjusted earnings per share of $0.08 in the fourth quarter, surpassing the consensus loss (0.02) of $0.02, with sales of $485.19 million, missing a consensus of $491.0 million.

The company believes that the production of 90.0-95.0 MBOE/D in 2025 consists of 69% oil and 79% liquid.

In addition, Talos is expected to produce 99.0-101.0 mboe/d, with oil volume of 68% in the first quarter of 2025.

The results highlighted a 1% increase in oil volume and a 16%-12% reduction in capital expenditure, with a strong FCF beating with JPME/Ste, demonstrating the strength of its asset base, analysts wrote.

Jayaram noted that the company revealed a 2025 operating plan with revenues higher than expected capital efficiency in the fourth quarter.

Analysts added that capital expenditure in fiscal 25 was 13%-15% lower than JPME/Ste, while the quantity matched the estimates.

The analyst said the 2025 guidance may be conservative, with weather/unplanned risk of ~4 mboe/d in about 6 mboe/d of planned downtime, indicating that production capacity is close to 100-105 mboe/d.

Jayaram estimates that the total capital expenditure of 94 MBOE/D projects scheduled for fiscal 25 is $630 million.

He also saw oil volumes of 65 MBO/d in 2025, which were expected to be 69 MBO/d in the first quarter, which remained flat in turn, and flat from the fourth quarter of FY24.

Jayaram’s oil deck on JPM’s 2025 oil and gas price deck is $69.86/bbl, gas 353/MCF forecast, FCF forecasts about $350 million, which could support an increased share buyback as Talo has reached its $1.25 million debt target, which could support a $1.25 million debt target.

and Paul Goodfellow Analysts said as CEO, he looks forward to the company’s updated cash return strategy.

Price actionTALO stock fell 2.28% to $8.16 in the last check.

Read the next article: