Earthstone Energy (ESTE) Valuation Update - Aug 6

[dan_s]

ESTE closed at $14 on August 5.

TipRanks consensus price target is $26.50, but none of the price targets in their database have been updated since the company releases very strong Q2 results. Despite Earthstone's incredible growth, the Company still has few analysts covering it. I do expect Truist Financial to publish an update early next week. On 6-29-2022 Neal Dingmann's price target was $35/share.

I have updated my forecast/valuation model for Q2 results and the Company's fresh guidance for 2H 2022.
I have actually lowered by valuation multiple from 5.0 to 4.5 X annualized operating cash flow per share just until the Titus Acquisition closes, which is expected to close in September.

My valuation still increases by $2 to $37/share.

If 2H 2022 does play out as I have modeled, a valuation of more than $50/share within six months is likely.

We will be publishing an updated profile on Earthstone within a week, which should clarify why this small-cap has a lot of upside for us.