TALO is trading at $12.58. First Call's price target is $17.00. Northland Securities is the only firm that has updated their price target since Talos announced Q1 results. Their price target is $21.00.
I have updated my forecast/valuation model for TALO and I'm holding my valuation at $22.00. The outlook has improved, but I decided to reduce the multiple of operating cash flow from 4.0X to 3.5X used to value it until we get some clarification on the Zama project. Working with foreign oil companies is a pain in the neck, as I found out while working at Hess. Mexico is holding up approval of the development plan, not Talos.
We will be publishing an updated profile on Talos this month and I will contract the company to see if I can clarify a few items.
Puma West and Zama are major oil discoveries, so hang tough on this one. From where it is trading today it has low risk with a lot of upside.
Talos Energy (TALO) Valuation - May 7
Talos Energy (TALO) Valuation - May 7
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group