Laredo Petroleum (LPI) Update - June 23
Posted: Wed Jun 23, 2021 6:45 pm
I have updated my forecast/valuation model for LPI and I have "stretched it" as far as I can without getting more information.
As of today my maximum valuation is $87.50 per share. LPI closed today at $81.12 today.
The most recent analyst's report I can find is from John Gerdes at MKM Partners on 6/4/2021 at which time he rated LPI a BUY with a price target of $79/share. John Gerdes is one of the best energy sector analysts.
Per TipRanks: Since May 10th a total of six energy sector analysts have updated their price targets to $44 to $79.
Laredo only has 15.4 million shares outstanding after their two "transformative transactions" close in July. That is a very low share count for a company of this size (~75,000 Boe per day of production), so a small change in my forecast assumption does have a big impact on the valuation. For example, if WTI does go to $80/bbl my valuation goes to $95/share.
It is hard to sell stocks that are on a run like this, but if you have a significant number of shares, I suggest to you that selling half might be wise. Harvesting gains in never a bad idea.
I am keeping LPI in the Sweet 16 because it does have a lot of upside for us if commodity prices keep going up. $100/bbl WTI is looking more possible each day.
As of today my maximum valuation is $87.50 per share. LPI closed today at $81.12 today.
The most recent analyst's report I can find is from John Gerdes at MKM Partners on 6/4/2021 at which time he rated LPI a BUY with a price target of $79/share. John Gerdes is one of the best energy sector analysts.
Per TipRanks: Since May 10th a total of six energy sector analysts have updated their price targets to $44 to $79.
Laredo only has 15.4 million shares outstanding after their two "transformative transactions" close in July. That is a very low share count for a company of this size (~75,000 Boe per day of production), so a small change in my forecast assumption does have a big impact on the valuation. For example, if WTI does go to $80/bbl my valuation goes to $95/share.
It is hard to sell stocks that are on a run like this, but if you have a significant number of shares, I suggest to you that selling half might be wise. Harvesting gains in never a bad idea.
I am keeping LPI in the Sweet 16 because it does have a lot of upside for us if commodity prices keep going up. $100/bbl WTI is looking more possible each day.