2016 forecast
2016 forecast
I just read your forecast. Two questions: One, the average PE is 32. That seems awfully high to me, which makes me wonder if those share prices are achievable? Two, SM is shown to lose money on the year. If so, why is it in the Elite 8?
Re: 2016 forecast
The "actuals" for the first three quarters include the non-cash impairment charges. SM will generate over $13/share of cash flow from operations this year, so it is trading at less than 2X CFPS. Even if oil and gas prices stay near current levels for all of 2016 they will generate around $10 CFPS.
Take a look at my forecast model for SM and you will see that they are generating more than enough cash flow from operations to survive.
On each individual company I am now putting a box that shows First Call's estimated cash flow per share for the next few year, so you can see how my forecasts compare to what other analysts are predicting.
BTW SEC and GAAP rules do not consider hedges in the impairment calculations.
Take a look at my forecast model for SM and you will see that they are generating more than enough cash flow from operations to survive.
On each individual company I am now putting a box that shows First Call's estimated cash flow per share for the next few year, so you can see how my forecasts compare to what other analysts are predicting.
BTW SEC and GAAP rules do not consider hedges in the impairment calculations.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group