Magnolia Oil & Gas (MGY) Valuation Update - May 10

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dan_s
Posts: 34463
Joined: Fri Apr 23, 2010 8:22 am

Magnolia Oil & Gas (MGY) Valuation Update - May 10

Post by dan_s »

MGY was trading at $23.30 at the time of this post. I have updated my forecast/valuation model for MGY's solid Q1 results and updated guidance.

My valuation increases by $2 to $34 per share.
Why?
> None of the Company's production is hedged.
> Strong balance sheet with no near-term debt issues.
> Steady production growth with ~12% YOY growth in 2022; approaching 78,000 Boepd by year-end.
> 2022 operating cash flow forecast of $1,220 million - capex budget of $400 million = free cash flow of $820 million
> Stock repurchase program expected to reduce outstanding common stock by 1% per quarter.
> Dividend increases likely
> My valuation is 7X annualized operating cash flow per share.

TipRanks: "On 5/10/2022 Gabriele Sorbara at Siebert Williams Shank & Co increases his price target to $37.00"
Dan Steffens
Energy Prospectus Group
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