Newfield Exploration (NFX) - Update

[dan_s]

In the last 3 months, 12 ranked analysts set 12-month price targets for NFX. The average price target among the analysts is $37.22. The price targets range from $29 to $46. The low end targets are based on very low commodity prices.

NFX closed at $31.53 on Friday, December 29.

I have updated my forecast model for NFX and it will be posted to the EPG website later today. My valuation increases by $4 to $52.

Things to remember about Newfield:
> It is one of the "Elite Eight" in the Sweet 16, with production over 170,000 Boepd (39% crude oil, 39% natural gas and 22% NGLs).
> Some of the Wall Street Gang lumps NFX in with the "gassers", which may explain its low share price. However, more than 80% of Newfield's revenues are from liquid sales.
> NFX has one of the largest leasehold positions in SCOOP and STACK. NFX actually is the company that named STACK.
> If oil stays above $50/bbl, NFX will report solid earnings and cash flow growth quarter-after-quarter.
> Like the other large-caps, NFX will get a nice boost from the lower corporate income tax rates.
> Production growth s/b ~21% YOY in 2018.
> 2018 drilling program s/b fully funded by cash flow from operations.
> Oil prices and well results in STACK should push the Wall Street Gang's valuations higher.