Liberty Energy boasts sizable cash return, strong frac fundamentals, JPM says

grandriver/E+ via Getty Images

Liberty Energy (NYSE:LBRT) +5.3% in Wednesday's trading after the company reinstated a quarterly cash dividend of $0.05/share and bought back ~$70M of stock, and J.P. Morgan said rising cash returns could drive further gains for the shares.

"Further execution on cash return could support higher multiples for the stock and sector given improving signs of capital discipline," J.P. Morgan analyst Arun Jayaram said, maintaining his Buy rating and $20 price target.

Liberty's (LBRT) "differentiated focus on technology, data analytics and talent has allowed it to deliver peer-leading profitability and return metrics through the cycle," Jayaram wrote, adding that increased E&P spending should boost the company's margins near term "as fleet utilization remains at elevated levels in a tightened frac market."

Liberty Energy (LBRT) "has invested in next-generation innovative technology poised to lower carbon emissions, noise levels, and save on fuel consumption," Stella Mwende writes in an analysis published on Seeking Alpha.