Magnolia Oil & Gas 2Q26 Earnings Preview: Slight Cash Flow Beat; All Eyes on Potential East Texas M&A

Research evidence excerpt

Magnolia Oil & Gas 2Q26 Earnings Preview: Slight Cash Flow Beat; All Eyes on Potential East Texas M&A

Arun Jayaram AC North America Equity Research

(1-212) 622-8541 10 July 2026 J P M O R G A N

arun.jayaram@jpmchase.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

Solid business model but trading at a premium to peers:

While MGY has a pristine balance sheet, long history of cash

return, and a target for high-single-digit volume growth, it trades

at a premium to Smid-cap peers. While we are fans of MGY’s

business model and believe it has done an excellent job

delineating the Giddings Field, recent well productivity data has

indicated a deterioration in well results in the Giddings Field,

and we see more attractive opportunities in the E&P space.

Valuation

YTD 1m 3m 12m

Abs 18.2% -5.2% -12.8% 10.6% Our Dec 2026 price target is based on NYMEX strip pricing. Our

Rel -2.4% -9.5% -26.3% -22.2% NAV methodology begins with a DCF of the company’s PDP

reserves, adjusted for the company’s operating costs, ourCompany Data

commodity price assumptions, and balance sheet items. Our

Shares O/S (mn) 185

52-week range ($) 32.76-21.07 undeveloped valuation is based on a future development

Market cap ($ mn) 4,785.95 schedule. Our Dec 2026 price target is at parity with our NAV at

Exchange rate 1.00 strip.

Free float (%) 97.7%

3M ADV (mn) 2.58

3M ADV ($ mn) 72.2

Performance DriversVolatility (90 Day) 33

Index RUSSELL 2000

BBG ANR (Buy | Hold | Sell) 11|9|0

Key Metrics (FYE Dec)

$ in millions FY25A FY26E FY27E

Financial Estimates

Revenue 1,312 1,521 1,420

Adj. EBITDA 905 1,096 993

Adj. EBIT 439 585 463

Adj. net income 336 448 351

Adj. EPS 1.76 2.44 1.98

BBG EPS 1.75 2.77 2.47

Cashflow from operations 879 999 952

FCFF 437 567 458

Margins and Growth