Laredo Petroleum (LPI) Update - August 24

[dan_s]

TipRanks: "In the last 3 months, 6 ranked analysts set 12-month price targets for LPI. The average price target among the analysts is $82.83. The price targets range from $49 to $105." < The two most recent price target updates are $72 and $49.

LPI is an extremely "high beta" stock because it only has 16.8 million shares outstanding. That is very few shares for a company of this size. Small changes in my forecast model assumptions for production and realized commodity prices have significant impact on my valuation for this mid-cap. If you believe that WTI will average $70/bbl in 2022, a reasonable 12-month price target is $120.

Laredo's production is expected to decline from 85,917 Boepd in Q2 to ~76,000 Boepd in Q3, but their revenues will be much higher because of significant changes in their production mix thanks to two transactions that closed July 1, 2021.
> During 1H 2021 Laredo generated $165.2 million of operating cash flow, $12.17/share.
> During 2H 2021 my forecast is that Laredo will generate $268.3 million operating cash flow, $15.97 per share.
> My 2022 forecast based on $70/bbl WTI and $3.25/MMBtu HH gas prices shows Laredo generating $38 to $40 operating cash flow next year.

[dan_s]

My updated profile and forecast model for LPI have been posted to the EPG website. You can view them directly from the home page.