Keep this in mind

[dan_s]

On all of my forecast/valuation models for the Sweet 16 and our other model portfolio companies, I show First Call's estimates for Revenue, EPS and CFPS. I do this so you can see if my forecasts are "reasonable". The most important is Operating Cash Flow Per Share ("CFPS"). This is why I highlight it in a Red Box on each forecast model.

Keep in mind that all of the numbers on the models are as of the date of the report.

First Call numbers are the average of all analysts' forecast models submitted to Reuters. Some of the models that First Call is including in their averages are several months old, so they do not include Q4 actuals. This is especially true for the smaller companies. Wall Street firms move quickly to update forecasts for large-caps like EOG, PXD, and CLR. It often takes them months to update models for companies like CPE, GPOR and MTDR.

So, what I'm looking for on the smaller companies is are they moving toward or away from my forecast.

I have the ability to see the most recent analysts' reports that have been submitted to Reuters. They are the most important to me.

Very encouraging to me is that almost all of the Wall Street firms have significantly increased the oil prices being used in their forecast models. A few firms are still using $50 WTI, which explains the big spreads in stock price targets.

Increasing the commodity price decks is the beginning of the "Paradigm Shift" that needs to occur on Wall Street, so investors feel safe moving more money into this beaten down sector.

[mattreue]

Thanks for this explanation and background. I did not know who "First Call" was. The information that the price decks are being increased in analyst's models is encouraging. (I need all the encouragement I can get right now).

[dan_s]

I think most of the Wall Street analysts do believe that higher oil and NGL prices are here to stay. The hard part is convincing the big hedge fund managers to move more money into the sector. In April, supply/demand for oil is going to get a lot tighter.