SilverBow Resources (SBOW) Update - Sept 12

dan_s
Posts: 33222
Joined: Fri Apr 23, 2010 8:22 am

Re: SilverBow Resources (SBOW) Update - Sept 12

Post by dan_s »

Keep in mind that SBOW was up almost 50% YTD prior to the announcement to raise a little equity to close an accretive acquisition that now looks even more accretive. Lots of investors tighten up their stop loss orders when they have big gains on a stock. BTW all of this year's gains have been since the end of May. Profit taking does happen from time-to-time when stocks gain 50% in three months.

Take a hard look at my forecast model. SilverBow should generate close to $33/share of operating cash flow in 2024 if WTI averages $90. It will be free cash flow positive and have a lot more running room in South Texas thanks to the Chesapeake Acquisition.

Is there any reason that this stock should be trading for less than 2X operating CFPS. If so, I sure don't see it.

TipRanks: "In the last 3 months, 3 ranked analysts set 12-month price targets for SBOW. The average price target among the analysts is $54.67. Neal Dingmann at Truist Financial (rated 5 Star by TipRanks) rates it a BUY with a $59 price target, using an EV/EBITDAX multiple of just 3.5 X (very conservative)."
Dan Steffens
Energy Prospectus Group
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