PDC Energy (PDCE) Q2 Results - Aug 5

[dan_s]

Stifel' Take and Price target. My valuation of PDCE is $78/share.

PDC Energy (PDCE, $38.50, Buy; Target $63.00)
Solid 2Q Beat, 2021 Guidance Reflects Inflation - Michael S. Scialla
We view the release as neutral. The positives include: i) 2Q FCF exceeded consensus by 31% as CFPS/capex beat by 8%/7%; ii) debt was reduced by $50MM during the quarter and the 2021 debt reduction target increased to $600MM from >$350MM; iii) 2021 FCF guidance increased 33% to $800MM+ (primarily due to higher realized prices) and 2021 expected dividends plus repurchases increased to >$180MM from >$150MM; The negatives include: i) 2021 capex/production guidance increased/decreased 5%/1% at the midpoint; ii) 2Q21 oil production was 3% below consensus although gas and NGL"s offset the shortfall on a Boe basis. In summary, a positive investor reaction to a strong 2Q beat will likely be muted by higher capex guidance (albeit only 1% above consensus as management previously noted OFS inflation).

I am now totally buried in Q2 results and updated guidance, so it will be a few days before I can update my model for PDCE. It is a rock solid company.