Parsley Energy (PE)
Posted: Sun Dec 31, 2017 2:49 pm
In the last 3 months, 8 ranked analysts set 12-month price targets for PE. The average price target among the analysts is $35.25. Price targets range from $32 to $38.
PE closed at $29.44 on Friday, December 29.
Parsley has provided some production guidance for 2018. I have updated my forecast/valuation model and it will be posted to the EPG website late today.
My valuation goes up $4 to $45.
This mid-cap is going to report some impressive growth and solid earnings quarter-after-quarter if oil prices stay above $50/bbl. For each dollar WTI goes over $50, my valuation goes up $1/share.
Things to remember about Parsley Energy:
> It is a pure play on the Permian Basin.
> It is quite similar to FANG, but growing production faster.
> Production growth will be more than 75% YOY in 2017. My valuation is based on production growth of ONLY 50% YOY in 2018.
> There are few upstream companies with this much near-term growth potential.
> Cash Flow From Operations s/b near $1 Billion in 2018, which should fund all of their drilling & completion capex
> As Wall Street gains more confidence in the price of oil, this is exactly the kind of company they will be looking for.
Take a look at row 65 on my forecast model and see how it compares to First Call's revenue forecasts by quarter.
PE is one of my Top Picks for 2018.
PE closed at $29.44 on Friday, December 29.
Parsley has provided some production guidance for 2018. I have updated my forecast/valuation model and it will be posted to the EPG website late today.
My valuation goes up $4 to $45.
This mid-cap is going to report some impressive growth and solid earnings quarter-after-quarter if oil prices stay above $50/bbl. For each dollar WTI goes over $50, my valuation goes up $1/share.
Things to remember about Parsley Energy:
> It is a pure play on the Permian Basin.
> It is quite similar to FANG, but growing production faster.
> Production growth will be more than 75% YOY in 2017. My valuation is based on production growth of ONLY 50% YOY in 2018.
> There are few upstream companies with this much near-term growth potential.
> Cash Flow From Operations s/b near $1 Billion in 2018, which should fund all of their drilling & completion capex
> As Wall Street gains more confidence in the price of oil, this is exactly the kind of company they will be looking for.
Take a look at row 65 on my forecast model and see how it compares to First Call's revenue forecasts by quarter.
PE is one of my Top Picks for 2018.