Permian Resources (PR) is likely to post a strong Q3 as higher oil production and accelerated activity amid strong oil prices support results, while efficiency gains and acquisitions could underpin further growth in 2027, RBC Capital Markets said.

The investment firm raised its Q3 estimates to $0.66 in earnings per share and $1.56 in cash flow per share, above the $0.57 and $1.43 consensus estimates, and modeled production of 442,000 barrels of oil equivalent per day, including 205,000 barrels of oil, versus the 430,000 consensus.

RBC said in a Thursday note that the drilling efficiency could improve further as the company moves closer to its best drilling times, while lower-cost microgrids and the use of surfactants could also help reduce costs and improve well performance.

The brokerage expects 2027 oil output growth at the mid-to-high end of the company's 0% to 10% target, with a budget near $2.1 billion as consumable costs rise. Management is confident of about $1 billion in acquisitions annually to replenish an inventory that currently has a 15-year duration.

RBC has an outperform rating and a $27 price target on the stock.

Shares of Permian Resources were up 2.3% in Friday trading.

Price: 23.38, Change: +0.54, Percent Change: +2.34