At the time of this post NOG was trading at $41.40.
I have updated my forecast/valuation model for their Q2 results that were very close to my forecast model. I have gained a lot more confidence in my forecast model for NOG and I appreciate that they give very accurate guidance.
My valuation stays the same at $60/share. Closing of the Novo Acquisition on August 15th and strong Q3 and Q4 results should draw a lot of attention to this aggressive growth company. They have closed seven acquisitions since I started following the company and they have all been accretive to operating cash flow. I really like the fact that they have teamed up with Earthstone Energy (ESTE) on the Novo Acquisition because you now have two acquisition teams that know how to negotiate and close deals. Earthstone is a very good operator.
If oil does go to $90/bbl, NOG will have a lot of free cash flow in 2024 to raise their dividends.
TipRanks: "In the last 3 months, 9 ranked analysts set 12-month price targets for NOG. The average price target among the analysts is $44.78." < None of them have adjusted their price targets since the company announced Q2 results. Keep in mind that some of the Wall Street Gang does not give much credit to acquisitions until they close. Novo is a very big deal for NOG and ESTE. It is heavily weighted to oil and it will add a lot of high quality running room for both companies.
Northern Oil & Gas (NOG) Valuation Update - Aug 3
Northern Oil & Gas (NOG) Valuation Update - Aug 3
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Northern Oil & Gas (NOG) Valuation Update - Aug 3
Northern Oil and Gas, Inc. (NOG, $41.59, Buy) - Lots of Things
to Do In-House or Externally with Non-Op Market Cornered -
Northern is in a unique position after completing several, what we
consider to be accretive acquisitions, seeing baseline production
improve and having a solid balance sheet. We forecast the
company to generate a '24 FCF yield of nearly 30%; one of the
highest in our coverage group despite NOG recently hitting its 52
week high stock price. The company is in an enviable position of
being the largest non-operated E&P uniquely positioned for any
future accretive deal. We are increasing our PT to $56 from $54. -
Neal Dingmann, Truist Financial
to Do In-House or Externally with Non-Op Market Cornered -
Northern is in a unique position after completing several, what we
consider to be accretive acquisitions, seeing baseline production
improve and having a solid balance sheet. We forecast the
company to generate a '24 FCF yield of nearly 30%; one of the
highest in our coverage group despite NOG recently hitting its 52
week high stock price. The company is in an enviable position of
being the largest non-operated E&P uniquely positioned for any
future accretive deal. We are increasing our PT to $56 from $54. -
Neal Dingmann, Truist Financial
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group