The market is about right about the balance between merger savings and cheaper oil. Asset-sale proceeds and buybacks should support cash generation per share, but the earnings being sold limit the benefit. My twelve-month target is $50.44.
Key points
- $50.44 a share is my twelve-month target: hold, with oil setting the ceiling.
- $4.2 billion gross from the Eagle Ford sale should fund buybacks and debt reduction.
- $900 million annually is my 2028 merger-savings estimate, below management’s exit-2027 goal.
The call
The market is about right, not betting on today’s oil price lasting. Under my cash-return assumptions, the stock requires $13.8 billion of 2028 operating cash profit before interest and taxes. That translates to roughly $71 a barrel for U.S. benchmark oil, assuming unchanged production and my gas-price forecast.
Oil supplies most revenue from the assets being sold ($ millions)- Oil682.387%
- Natural gas44.55.7%
- Natural gas liquids60.47.7%
Crescent October 8, 2026 8-K, Exhibit 99.4; Eagle Ford first-half 2026 sales, before hedges.
I expect savings and buybacks to cushion cheaper oil. My 2028 forecast uses $75 oil and $2.35 per thousand cubic feet of realized gas. The sale removes only a small production share, but substantial oil income. November’s combined-company outlook should show how much cash remains after that loss.
Valuation
| Driver or adjustment | My estimate |
|---|
| 2028 operating cash profit before interest and taxes | $14.4 billion |
| Base business-value multiple | 3.75 times |
| Premium for prime Permian acreage | 0.25 times |
| September 2027 debt minus cash | $4.5 billion |
| September 2027 diluted shares | 1.05 billion |
| October 2027 price target | $50.44 a share |
The combined multiple is four times cash operating profit, with the acreage premium worth about $3.42 a share; persistent weak well returns would erase it. My forecast assumes flat post-sale production, $5.3 billion of 2027 drilling investment and $4.9 billion of repurchases through September 2027. Commodity risk limits the reward, supporting a hold rather than a buy.
Lower oil prices can outweigh the sale and savingsAnalyst October 9, 2026 model; 2028 oil scenarios, $2.35/Mcf gas, 4 times operating cash profit.
Risks
- Higher oil prices could make my target too low; watch restored Middle East exports and global inventory rebuilding.
- Gas could stay trapped behind limited pipelines; watch realized selling prices, not just national benchmarks.
- Sale taxes or integration spending could consume buyback cash; watch net proceeds, shares outstanding and cash generation excluding temporary payment timing.
What would change my mind
Two combined-company quarters showing annualized recurring free cash flow above $8 billion with benchmark oil below $80 a barrel would justify a higher target.