Callon Petroleum (CPE) Valuation Update - July 1
Posted: Fri Jul 01, 2022 2:17 pm
At the time of this post, CPE was trading at $38.94.
I just update my forecast/valuation model for CPE and there is nothing that I can find that justifies today's low share price.
My updated valuation of $123.00 is just 4.5 X annualized operating cash flow per share for 2021 to 2023. That is a conservative multiple.
TipRanks current price target is $89.00, which is the average price target for analysts' reports submitted in the last 3 months.
Four highly respected energy sector analysts updated their price target in June.
RBC Capital 6/24/2022: $75.00
Stifel Nicolaus 6/17/2022: $145.00
Truist Financial 6/7/2022: $101.00
Siebert Williams 6/7/2022: $68.00
My 2022 Operating Cash Flow per share estimate is now $30.84, which compares to the TipRanks' CFPS estimate of $27.95. Again, there is NOTHING that justifies CPE trading at less than 2X CFPS.
Callon is on pace to generate over $1.1 Billion of free cash flow from operations this year.
The Company's production mix is approximately 64% crude oil, 19% NGLs and 17% natural gas. The recent ngas price dip only lowered my valuation by $2.00
If Callon's actual results match my forecast, their balance sheet will be in very good shape and a valuation multiple of 6X CFPS would push the stock valuation up to $185/share.
I just update my forecast/valuation model for CPE and there is nothing that I can find that justifies today's low share price.
My updated valuation of $123.00 is just 4.5 X annualized operating cash flow per share for 2021 to 2023. That is a conservative multiple.
TipRanks current price target is $89.00, which is the average price target for analysts' reports submitted in the last 3 months.
Four highly respected energy sector analysts updated their price target in June.
RBC Capital 6/24/2022: $75.00
Stifel Nicolaus 6/17/2022: $145.00
Truist Financial 6/7/2022: $101.00
Siebert Williams 6/7/2022: $68.00
My 2022 Operating Cash Flow per share estimate is now $30.84, which compares to the TipRanks' CFPS estimate of $27.95. Again, there is NOTHING that justifies CPE trading at less than 2X CFPS.
Callon is on pace to generate over $1.1 Billion of free cash flow from operations this year.
The Company's production mix is approximately 64% crude oil, 19% NGLs and 17% natural gas. The recent ngas price dip only lowered my valuation by $2.00
If Callon's actual results match my forecast, their balance sheet will be in very good shape and a valuation multiple of 6X CFPS would push the stock valuation up to $185/share.