Truist analyst Neal Dingmann raised the firm's price target on PDC Energy to $69 from $55 and keeps a Buy rating on the shares as part of a broader research note on Energy E&Ps. The analyst is updating his model with a 10% increase in assumed oil prices for 2021-2023 and also includes free cash flows in addition to EBITDA projections in his valuation analysis.
PCDE is trading at $47.36 at the time of this post.
I am updating my forecast/valuation model and will post my increased valuation shortly. It will be higher than Neal's price target.
PDC Energy (PDCE) Update - July 1
PDC Energy (PDCE) Update - July 1
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: PDC Energy (PDCE) Update - July 1
Sorry for the delay. I got tied up on another "assignment" and didn't get back to PDC until 5:30.
I have finished updating my forecast/valuation model for PDCE. I am increasing my CURRENT valuation by $16 to $78.
PDC has a relatively low number of shares (99.3 million) for a company of its size. The significant increase in oil, gas and NGL prices makes a big difference in my model. Despite some "Bad Hedges", this Company is on-track to generate a $Billion of free cash flow from operations this year. It already has a strong balance sheet, so they have a lot of options for all of that cash. They already have an active stock buyback program that significantly reduces risk. I am still just valuing the stock at 4.5 X 2021+2022 operating cash flow. If most of its production was outside of Colorado, my valuation would be over $100.
If WTI does average $75/bbl in 2022 a reasonable 12-month price target is $100, which is just 5X my 2022 operating cash flow per share forecast.
I have finished updating my forecast/valuation model for PDCE. I am increasing my CURRENT valuation by $16 to $78.
PDC has a relatively low number of shares (99.3 million) for a company of its size. The significant increase in oil, gas and NGL prices makes a big difference in my model. Despite some "Bad Hedges", this Company is on-track to generate a $Billion of free cash flow from operations this year. It already has a strong balance sheet, so they have a lot of options for all of that cash. They already have an active stock buyback program that significantly reduces risk. I am still just valuing the stock at 4.5 X 2021+2022 operating cash flow. If most of its production was outside of Colorado, my valuation would be over $100.
If WTI does average $75/bbl in 2022 a reasonable 12-month price target is $100, which is just 5X my 2022 operating cash flow per share forecast.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group