Carrizo Oil & Gas (CRZO) - Update
Posted: Thu Dec 28, 2017 6:58 pm
Talk about a wide range of opinions!!!!!!!!!!!!
In the last 3 months, 15 ranked analysts set 12-month price targets for CRZO. The average price target among the analysts is $26.89. Wall Street's valuations range from $16.50 to $39.00.
CRZO closed today at $21.70.
My valuation, based on what I believe to be conservative assumptions, is $37.60.
Carrizo is a company "in transition". They are selling two big asset packages (Utica and DJ Basin) to shore up the balance sheet and then focus all of their efforts on Texas. Their primary focus will be on the Permian Basin, but they also have plenty of good leasehold in the Eagle Ford. I think Wall Street will like this company when the smoke clears in January. Production guidance should help a lot.
Carrizo outspent their cash flow from operations in 2017 by approximately $200 million. Wall Street hates that. Based on my forecast and management comments, they should be able to live within cash flow and grow production in 2018. Carrizo is heavily weighted to oil.
The company has been reporting solid earnings and cash flow growth. Q4 results should beat the current First Call EPS estimate by a wide margin.
I will be moving CRZO back to our Small-Cap Growth Portfolio. As I said in the December newsletter, it is being replaced in the Sweet 16 by Matador Resources (MTDR).
My updated forecast/valuation model will be posted to the EPG website this evening.
In the last 3 months, 15 ranked analysts set 12-month price targets for CRZO. The average price target among the analysts is $26.89. Wall Street's valuations range from $16.50 to $39.00.
CRZO closed today at $21.70.
My valuation, based on what I believe to be conservative assumptions, is $37.60.
Carrizo is a company "in transition". They are selling two big asset packages (Utica and DJ Basin) to shore up the balance sheet and then focus all of their efforts on Texas. Their primary focus will be on the Permian Basin, but they also have plenty of good leasehold in the Eagle Ford. I think Wall Street will like this company when the smoke clears in January. Production guidance should help a lot.
Carrizo outspent their cash flow from operations in 2017 by approximately $200 million. Wall Street hates that. Based on my forecast and management comments, they should be able to live within cash flow and grow production in 2018. Carrizo is heavily weighted to oil.
The company has been reporting solid earnings and cash flow growth. Q4 results should beat the current First Call EPS estimate by a wide margin.
I will be moving CRZO back to our Small-Cap Growth Portfolio. As I said in the December newsletter, it is being replaced in the Sweet 16 by Matador Resources (MTDR).
My updated forecast/valuation model will be posted to the EPG website this evening.