Laredo downgrade!!

[Fraser921]

Name in the 40's!

Raymond James analyst John Freeman reiterated an Outperform rating on the shares of Laredo Petroleum Inc (NYSE:LPI) and lowered the price target from $75 to $63.
The analyst said Laredo did not have the best quarter after having run into some operational issues.
The analyst added that they moved production guidance for the year lower thanks to offset fracs causing lackluster performance.
The analyst also moved his full year 2023 capex up to ~$650 million to account for further inflation, and a second spot crew LPI will be running in the front half of the year.
That being said, even after oil prices have taken a sharp turn lower, the analyst anticipated about $150 million of free cash flow (FCF), with the majority going toward share repurchases and debt reduction.
The analyst specified that the company is already at ~1.2x debt/EBITDA with plenty of liquidity, having done some serious work on the balance sheet in the last two years.
The analyst said the lowered price target accounts for a lower price environment.
Price Action: LPI shares are trading higher by 1.21% at $50.90 on the last check Monday.

[dan_s]

For a company of this size, Laredo has a very low number of shares outstanding. Therefore, per share numbers are "crazy".
2021 Actual Results
> $8.49 earnings per share
> $26.42 operating cash flow per share

My 2022 Forecast
> $34.57 earning per share
> $46.55 operating cash flow per share.

So, the questions is: Should a profitable company with a strong balance sheet that is generating free cash flow trade for a PE ratio under 2?

What some other analysts' price targets are:
JP Morgan 12/5/2022 $69.00
Piper Sandler 11/17/2022 $72.00
Siebert Williams S 11/4/2022 $85.00
Stifel Nicolaus 10/31/2022 $127.00