What Recent Performance Says About Range Resources
Range Resources (RRC) has drawn fresh attention after a strong recent run, with the stock showing positive moves over the past week, month and past 3 months that stand out against its longer term record.
See our latest analysis for Range Resources.
The recent 1-day share price return of 1.75% and 30-day share price return of 15.43% sit alongside a 1-year total shareholder return of 22.76% and 5-year total shareholder return of about 3.5x. Together, these figures suggest momentum has been building over both shorter and longer periods around the latest US$47.65 level.
If this kind of move has you looking beyond a single stock, it could be a good time to see what else is setting up strong trends through the 8 top copper producer stocks
With Range Resources trading around US$47.65, sitting above the average analyst price target yet showing an estimated 39% intrinsic value gap, the key question is whether this represents a genuine value opportunity or whether the market is already pricing in future growth.
Most Popular Narrative: 13% Overvalued
Against the last close at $47.65, the most followed narrative points to a fair value around $42.17, built on detailed revenue, margin and cash flow assumptions.
Increasing U.S. LNG export capacity coming online over the next 18 months will open additional premium international markets for Range's gas and NGLs; with Range's unique East Coast export infrastructure and supply flexibility, this can drive higher realized prices and support upward revisions to earnings and free cash flow.
Curious what kind of revenue mix, margin profile and future earnings multiple are baked into that fair value gap? The narrative leans on steady growth assumptions, higher profitability and a specific discount rate that together do most of the heavy lifting.
Result: Fair Value of $42.17 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you still need to weigh the risk that tighter regulation in Appalachia or slower than expected gas demand could pressure revenues, margins, and cash flows.
Find out about the key risks to this Range Resources narrative.
Another Way To Look At Range Resources
The narrative built around a fair value of $42.17 leans heavily on analyst targets and assumed earnings paths. Our DCF model presents a different perspective, with a fair value estimate of $77.59. Under that framework, the current $47.65 price is below the value implied by those long term cash flow assumptions. Each investor should consider which framework they find more useful when making decisions.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Range Resources for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 62 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
The mix of optimism and concern around Range Resources is clear. If you want to move fast and form your own view, start by weighing its 3 key rewards and 1 important warning sign
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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