Concho Resources (CXO) Q4 Preview

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Concho Resources (CXO) Q4 Preview

Post by dan_s »

Since Concho issued production guidance for 2019 and 2020 in December (see the Investor Presentation on Concho's website), 12 analysts have updated their forecast/valuation models for the company and sent them to Reuters / First Call.

The 12 fresh report all have BUY recommendations for CXO and their valuations range from $118 to $262 per share. The average of the 12 valuations is $170/share. My valuation in the January newsletter was $164/share.

A few things to look for in Concho's Q4 report:
> It will be the first full quarter since their merger with RSP Permian. I am expecting production to be approximately 304,000 Boepd (64.5% crude oil)
> Concho reports natural gas and NGL production on a combined basis, hence the $4.21/mcfe realized gas price in Q3 2018.
> If they confirm their production guidance for 2019, my valuation and First Call's valuation should go up.
> From the December Investor Presentation: Concho said oil production would be up 35% to 40% YOY in 2019 and total production would be up 25% to 30%.

CXO is currently trading at ~$120/share.
Dan Steffens
Energy Prospectus Group
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