TALO - Talos Energy: A Gulf Of Mexico Standout

2024-04-03 07:00:00 ET

Summary

• Talos Energy stock has gained about 20% since early February, indicating a potential change in the company's story.
• Analyst EPS estimates have been cut significantly, but price targets for the stock range from $15 to $25.
• Talos Energy has made strategic moves, including selling part of its Mexico operations and monetizing its carbon sequestration portfolio, to prioritize cash flow generation and pay down debt.
• We think Talos stock is a buy at current levels but Q1 earnings could create an opportunity at a slightly lower price.

Introduction

It's been a year since we've discussed Talos Energy ( TALO ). Last March, we covered them with a buy rating . The stock has done precisely nothing since and currently sits within a few pennies of where it stood last year. We aren't going to do a post-mortem now. I think most of us understand that low oil and gas prices and debt are largely responsible for Talos' sideways trading over the last year. It's had a lot of company in that regard. Things could be looking up, if the recent trend in the stock is a guide....

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