Stifel's current price targets for the Sweet 16 - Feb 7

[dan_s]

Stifel sent out an update on the energy sector this morning. Below are their price targets for the Sweet 16 that they cover.

Stifel's PT / My valuation (note that Stifel does not cover all of the Sweet 16)

CPE: $95 / $90
CRK: $14 / $20
CTRA: $26 / $30
CLR: $72 / $72
EOG: $131 / $140
FANG: $158 / $160
LPI: $107 / $112
MTDR: $56 / $62
NOG: $27 / $42
PDCE: $82 / $93
RRC: $34 / $32
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CTRA, CLR, EOG and FANG are included in Stifel's "Bellwether" list.

If you'd like to see the full 40 page report from Stifel, send me an email dmsteffens@comcast.net

[dan_s]

Stifel's Price Targets on some of our other model portfolio companies. All of them are rated as BUYs by Stifel.

DVN: $61
PXD: $244
SM: $47
TALO: $26
BSM: $24
FLMN: $8
MNRL: $25
VNOM: $31

[dan_s]

Stifel's Upstream Oil & Gas report is 40 pages long and contains a lot of raw data. Most important to me is their operating cash flow estimates for each company, which is what I use to value each stock.

Here are two examples and how they compare to my forecasts

Stifel's estimate / My operating cash flow estimate in $millions
Continental Resources (CLR)
2021: $4,233 / $4,167
2022: $6,114 / $6,383
2023: $5,602 / $6,435

Comstock Resources (CRK)
2021: $932 / $928*
2022: $1,341 / $1,226*
2023: $1,411 / $1,278*
*My cash flow estimates include cash settlements on hedges.

The Wall Street Gang is primarily focused on "Free Cash Flow from Operations", which is operating cash flow - capex spending. This is why analysts (including me) will be focused on each company's capital spending guidance when they release Q4 results. PV10 value of Proved Reserves (P1) will also be very important because bankers focus on "Net Asset Valuations".

Per my forecasts, all of the Sweet 16 will be generating a lot of Free Cash Flow from Operations in 2022.

[dan_s]

Two of Stifel's Top Picks are in our High Yield Income Portfolio

Black Stone Minerals (BSM): We expect BSM to outperform on positive production and cash flow revisions. Additionally, we expect the value of its Haynesville position to re-rate due to an increasingly constructive natural gas macro backdrop and industry M&A, which should materially increase industry activity across its highest NRI acreage.

Devon Energy (DVN): We expect DVN to outperform on the quarter based on strong operations and advantaged return of capital messaging. Specifically, we project a 2022 dividend yield of 8.5% and believe that is biased higher based on management's commitment to increase its fixed dividend, which should make DVN the most attractive stock on yield within our Bellwether coverage universe.