Civitas Resources (CIVI) stock plummeted 12.34% during Tuesday's trading session, hitting a low of $45.93 in pre-market trading before partially recovering. The sell-off came after the oil and gas producer reported mixed fourth-quarter 2024 results that missed earnings estimates and provided a subdued 2025 outlook, prompting KeyBanc to downgrade the stock.

For the fourth quarter of 2024, Civitas posted adjusted earnings per share of $1.78, falling short of analysts' expectations of $1.98. The company's revenue of $1.29 billion also missed the consensus estimate of $1.30 billion, despite increases in total sales volumes and oil production compared to the prior quarter.

Looking ahead to 2025, Civitas plans to reduce capital investments by nearly 5% year-over-year to a range of $1.8 billion to $1.9 billion, disappointing investors anticipating higher production growth. The company aims to generate approximately $1.1 billion in free cash flow, assuming $70 per barrel WTI crude oil prices, with a focus on using the majority of that cash for debt reduction after dividends. However, Civitas also announced a 10% workforce reduction across all levels and the termination of its Chief Operating Officer and Chief Transformation Officer, raising concerns about potential strategy shifts or instability in management.