Earthstone Energy (ESTE) Price Target - Dec 20

[dan_s]

Truist Financial analyst Neal Dingmann

Earthstone Energy, Inc. (ESTE, $10.37, Buy) - Attractive Entry into the Delaware Basin Takes Company to New Overall Level
Earthstone announced an accretive entry into the NM DE Basin, acquiring assets from Chisholm (Private) for $604mm ($410mm of cash, 19.4mm shares) increasing production by ~40%, with the equity component raising Warburg Pincus ownership of ESTE to ~25% from ~15%. Deal valuation appears very reasonable to us given the guided 2022 EBITDAX; we are updating our estimates and raising our price target to $21 from $19.

My valuation is $23