Magnolia Oil & Gas (MGY) Update - Jan 16

[dan_s]

MGY was promoted to the Sweet 16 on 1-1-2022. It is off to a good start; up 17.8% YTD.
MGY closed at $22.23 on January 14th.
TipRanks:
"In the last 3 months, 10 ranked analysts set 12-month price targets for MGY. The average price target among the analysts is $24.22. On 1/14/2022 Truist Securities analyst Neal Dingmann raised the price target on Magnolia Oil & Gas Corp. (NYSE: MGY) to $28.00 (from $27.00) while maintaining a Buy rating."

I have updated my forecast/valuation model for MGY, which raises my valuation to $26.00.
> None of the Company's production is hedged, which adds a bit of risk but also more upside potential.
> For new additions to the Sweet 16, I always want to be more conservative in my forecast model assumptions.
> They do pay a small dividend, which should be raised this year. FCF should be over $1.00/share in 2022.
> The Company plans to announce Q4 and full year 2021 results on February 17th.
> MGY is a "Growth" company and I expect them to announce a nice increase in production from Q3 to Q4 2021 and steady production growth in 2022, completely funded by operating cash flow.

Magnolia is a publicly traded oil and gas exploration and production company with operations primarily in South Texas in the core of the Eagle Ford Shale and Austin Chalk formations. Magnolia focuses on generating value for shareholders through steady production growth, strong pre-tax margins, and free cash flow. For more information, visit www.magnoliaoilgas.com.