Sweet 16 Update - August 17

[dan_s]

All of the Sweet 16 forecast models have been updated and can now be viewed from our website. You can also download them to Excel and make changes to any of the forecast periods. The spreadsheets are all "macro-driven", so when you change the production or commodity price assumptions they will update EPS, CFPS and stock valuations automatically.

All of the companies reported solid Q2 results. The price of oil was up about $5/bbl Q1 to Q2, but natural gas and NGL prices were down. Natural gas prices were down BIG in West Texas and they will remain very low until more pipeline capacity opens up in Q4. All four of our gassers (AR, GPOR, RRC and SWN) have no production in West Texas and they have most of this year's gas production hedged at good prices.

All of my forecasts assume WTI will average $55/bbl in Q3. For the first half of this quarter, WTI has averaged more than $56/bbl. I do my best to adjust for regional differentials and hedges.
For natural gas, my assumptions are that Henry Hub gas will average $2.20 in Q3 and $2.40 in Q4.

The Sweet 16 main spreadsheet shows my valuations compared to First Call's valuations for each company.

Changes coming:
> CRZO will be dropped because it is merging with CPE. We will publish updated profiles for each one and the CPE profile will include a "Proforma" forecast assuming the merger closes in Q4.
> GPOR will be moved to the Small-Cap Growth Portfolio.
> SWN will be dropped.

I'm going to rank the small-caps to decide which companies deserve a promotion.

[dan_s]

On 8-15-2019 Piper Jaffray analyst Ryan Todd lowered the price target on Concho Resources (NYSE: CXO) to $117.00 (from $155.00) while maintaining a Overweight rating.

Other opinions:
$119.00 < Citigroup 8/5/19
$132.00 < JPMorgan 8/5/19
$70.23 < Morgan Stan 8/6/19
$188.00 < Stifel 8/2/19

I've finished updating the profile for Concho. It will be sent out early Monday morning via email to all EPG members.