Sweet 16 Growth Portfolio: An updated Net Income & Cash Flow Forecast for Plains Exploration & Production Company (PXP) has been posted under the Sweet 16 Tab. This is my first attempt to forecast 2013 earnings and cash flows since the company announced a major acquisition of offshore assets from BP. My forecast is build primarily from guidance the company gave during a presentation on 9-12-2012, which you can find on their website.
You can find my revised Fair Value estimate at the bottom of the forecast model.
First Call's 1-year Price Target is $54.38/share, which I believe is reasonable.
I do believe that PXP will trade in a narrow range for awhile, at least until the deal with BP closes and they are able to sell off some of their natural gas fields. I do think PXP will look very good a year from now.
They have hedged about 90% of forecast oil production for the next three years. This will make cash flow very predictible once the smoke clears. Note that my cash flow estimate for 2013 is close to $21/share.
PXP Updated Forecast
PXP Updated Forecast
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group