PDC Energy (PDCE) Forecast

[dan_s]

PDCE is another "Aggressive Growth" mid-cap in our Sweet 16. It has operations in the DJ Basin and the Delaware Basin.

Q1 production came in slightly below my forecast, but everything else was great. They beat my EPS and CFPS forecast. More importantly, they are on-track to deliver 40% to 45% YOY production growth in 2017 and their production growth should accelerate in 2018.

My valuation remains at $114.00/share, which compares to First Call's price target of $84.31. I could easily justify a much higher valuation. I think Wall Street will wake up on this one when they report more outstanding well results in the Delaware Basin (a sub-basin of the Permian Basin). Go to the company's website and go through their most recent presentation.

My forecast model will be posted to the EPG website later today. Take a hard look at the RED BOX.

[dan_s]

After you look at the RED BOX. Note that PDCE is trading today for less than 6X operating cash flow per share.

That is insanely low for a company with this kind of production growth locked in.