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JP Morgan Lowers Profit Growth Forecast for ProPetro, Slashes EBITDA Projections for 2025 and 2026

Benzinga - March 25, 2023

JP Morgan has reduced its profit growth forecast for ProPetro Holding Corp. (NYSE: PUMP), a leading oilfield services provider in the Permian Basin. The investment firm slashed its EBITDA projections for the company's 2025 and 2026 fiscal years.

According to JP Morgan's latest research report, the company now expects ProPetro's adjusted EBITDA to grow at a slower pace of 15% in 2025, compared to its previous forecast of 25%. For 2026, JP Morgan has reduced its EBITDA growth projection to 12%, down from 20%.

The reduced forecast is attributed to the company's exposure to declining oil prices, which could negatively impact its revenue and profitability. ProPetro's business is heavily reliant on the Permian Basin, where oil production is expected to slow down in the coming years.

JP Morgan analysts also cut their 2025 and 2026 earnings per share (EPS) estimates for ProPetro, citing the impact of lower oil prices on the company's profitability. The firm now expects ProPetro's EPS to grow by 10% in 2025 and 8% in 2026, down from its previous forecasts of 20% and 15%, respectively.

ProPetro's stock price has been under pressure in recent weeks, falling around 15% since the start of the year. The company's shares have been impacted by concerns over declining oil prices and the potential impact on its business.

Despite the reduced forecast, JP Morgan remains positive on ProPetro's long-term prospects, citing the company's strong operational performance and its ability to maintain its market share in the Permian Basin. The investment firm has a "neutral" rating on ProPetro's stock and a price target of $15.50 per share.