Price Decks

[mkarpoff]

You have often said that analysts often undervalue the projected price of a given stock because their firm's "price deck" is too low, and they must use the deck as their guide, but aren't they the firm's energy experts? If the experts aren't creating the price decks for the companies that fall within their purview, who then does create them, and why not the experts?

[dan_s]

I'm sure each firm has their own method for coming up with commodity price decks. Some use outside services. Some, like Raymond James, are much better than others when it comes to the energy sector. Some are "wackos" that believe oil based fuels will not be needed in a few years. All I know is that to come up with the low price targets that they submit to Reuters / First Call they must be using very low oil, gas and ngl prices in their models.