PDC Energy (PDCE) Update - Oct 20
Posted: Tue Oct 20, 2020 11:54 am
PDCE is trading at $12.67 at the time of this post.
TipRanks shows two new analyst's reports with BUY recommendations:
> KeyBank on 10/20/2020 with a price target of $21.00
> S Williams on 10/20/2020 with a price target of $21.00
> On 9/18/2020 Stifel rated it a BUY with a price target of 20.00 when ngas and NGL prices were much lower.
My valuation is now $30/share, primarily because I am using higher gas and NGL prices for 2021:
> PDC is generating lots of FCF from operations today, primarily because they have ~70% of their 2H2020 oil hedged at $58/bbl.
> The Company's production mix is approximately 40% natural gas, 25% NGLs and 35% crude oil. Their realized natural gas and NG prices will be a lot higher in 2021.
> Based on my forecast, FCF from operations should exceed $500 million in 2021 if they just hold production flat YOY.
> PDC has a strong balance sheet and plenty of liquidity that it doesn't need anyway because of outstanding cash flow from operations locked in; ~$900 million in 2020 & $1,100 million in 2021.
My updated forecast/valuation model will be posted to the EPG website this afternoon.
TipRanks shows two new analyst's reports with BUY recommendations:
> KeyBank on 10/20/2020 with a price target of $21.00
> S Williams on 10/20/2020 with a price target of $21.00
> On 9/18/2020 Stifel rated it a BUY with a price target of 20.00 when ngas and NGL prices were much lower.
My valuation is now $30/share, primarily because I am using higher gas and NGL prices for 2021:
> PDC is generating lots of FCF from operations today, primarily because they have ~70% of their 2H2020 oil hedged at $58/bbl.
> The Company's production mix is approximately 40% natural gas, 25% NGLs and 35% crude oil. Their realized natural gas and NG prices will be a lot higher in 2021.
> Based on my forecast, FCF from operations should exceed $500 million in 2021 if they just hold production flat YOY.
> PDC has a strong balance sheet and plenty of liquidity that it doesn't need anyway because of outstanding cash flow from operations locked in; ~$900 million in 2020 & $1,100 million in 2021.
My updated forecast/valuation model will be posted to the EPG website this afternoon.