CIVI Should I Buy
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Civitas Resources Inc (CIVI) is not a strong buy at the moment for a beginner, long-term investor with $50,000-$100,000 available. The stock is facing multiple headwinds, including declining financial performance, mixed analyst ratings, and a lack of strong technical or proprietary trading signals. While the pending merger with SM Energy could unlock future value, the current price trend and financial metrics do not provide a compelling entry point for long-term investment.
The MACD is positive but contracting, RSI is neutral at 53.282, and moving averages are converging, indicating no clear trend. Key support and resistance levels are close to the current price, with the pivot at 27.404. The stock is trading near its support level, but no strong breakout or reversal signals are present.
The pending merger with SM Energy could create value through synergies and operational efficiencies. Analysts like KeyBanc and Mizuho have expressed optimism about the merger's potential to drive free cash flow and deleveraging. Additionally, the broader energy sector is expected to improve in 2026, which could benefit CIVI.
Civitas Resources is being removed from the S&P MidCap 400, which could reduce institutional investor interest. Hedge funds are selling the stock, with a significant increase in selling activity over the last quarter. Financial performance has been weak, with YoY declines in revenue (-8.18%), net income (-40.16%), EPS (-33.89%), and gross margin (-7.72%). Analysts have mixed ratings, with some downgrades and reduced price targets, reflecting uncertainty around the merger and operational execution.
In Q3 2025, Civitas Resources reported declining financials: Revenue dropped to $1.168 billion (-8.18% YoY), Net Income fell to $177 million (-40.16% YoY), EPS decreased to $1.99 (-33.89% YoY), and Gross Margin dropped to 42.81% (-7.72% YoY). These metrics indicate weakening profitability and operational performance.
Analyst sentiment is mixed. Morgan Stanley and UBS maintain neutral ratings with reduced price targets, while Piper Sandler downgraded the stock due to concerns about the SM Energy merger. Mizuho remains optimistic, raising its price target to $55, citing the merger as a meaningful opportunity. However, the overall trend in price targets has been downward, reflecting cautious sentiment.
