8 Most Undervalued Oil Stocks To Buy According To Analysts

02. GeoPark Limited (NYSE:GPRK)

Upside Potential: 84%

Forward Price to Earnings (P/E) ratio: 2.53

Number of Hedge Fund Holders: 15

GeoPark Limited (NYSE:GPRK) stands out among undervalued oil stocks with a forward P/E ratio of just 2.53 as of October 14, signaling a significant buying opportunity. Analysts see an 84% upside, with a target price of $15.33 compared to its current share price of $8.32. This makes GeoPark an appealing pick for investors looking for a bargain in the oil and gas sector.

Operating across Chile, Colombia, Brazil, Argentina, Ecuador, and other Latin American regions, GeoPark Limited (NYSE:GPRK) specializes in exploring and producing oil and gas reserves. The company has a strong reputation for managing operations efficiently, and its Q2 2024 earnings report reinforces its robust fundamentals.

For the second quarter ending June 30, 2024, GeoPark Limited (NYSE:GPRK) reported a 14% jump in revenue to $190 million, driven by favorable oil prices. Adjusted EBITDA rose 15% to $128 million, reflecting an impressive EBITDA margin of 67%. Despite currency-related tax adjustments, the company posted a net profit of $25.7 million or $0.50 per share, showcasing sound financial health.

GeoPark Limited (NYSE:GPRK) operational efficiency is evident from its capital expenditure management. The company invested $49 million in the quarter, generating nearly three times that amount in adjusted EBITDA. The return on average capital employed over the past 12 months stood at a remarkable 38%. Meanwhile, GeoPark maintained a healthy cash position of $66 million after repurchasing shares, paying taxes, acquiring new assets, and distributing dividends.

Strategically, GeoPark Limited (NYSE:GPRK) recent acquisition of the Vaca Muerta assets is expected to boost production. The newly acquired Mata Mora Norte Block alone is contributing 12,500 barrels per day, and further exploration in the Llanos basin offers promising growth opportunities. The company’s ongoing exploration activities are also expected to ramp up production levels heading into 2025.

GeoPark Limited (NYSE:GPRK) has demonstrated its commitment to shareholder returns, distributing $7.5 million in dividends during the quarter and repurchasing $43.7 million in shares. With strong cash flow, disciplined capital management, and strategic growth initiatives, GeoPark Limited (NYSE:GPRK) is well-positioned to capitalize on future opportunities, making it a compelling choice for investors seeking undervalued oil stocks with long-term potential.