Laredo Petroleum (LPI) Update - July 22

[dan_s]

TipRanks: "On July 22, 2022 Laredo Petroleum price target raised to $120 from $117 at Piper Sandler."

At the time of this post, LPI was trading for $74.71. Its 52-week trading range is $36.25 to $120.86. To say this is a "High Beta" stock is an under-statement.

I have updated my forecast/valuation model for LPI and it will soon be posted to the EPG website home page. My current valuation is $152.00 per share, but if the Company's actual results for 2022 match my forecast assumptions, a valuation close to $250/share may be justified.

Laredo is actually easy to model. They provide conservative production guidance and line-by-line expense guidance. The reason the stock price flops around so much is because it only has 17.3 million shares of common stock outstanding and the Day Traders love companies like this. It is extremely profitable ($8.49 EPS and $26.42 operating CFPS in 2021) and likely to double those results in 2022. Profits like that make it a low-risk stock and the low trading volume creates the big price movements that Day Traders love.

Since June 1st, five highly respected energy sector analysts have updated their price targets to $102 (JPMorgan on 7-19-2022) to $194 (Stifel Nicolaus on 6-10-2022).

My Q2 forecasts of $6.88 EPS and $13.01 operating CFPS are slightly lower than the average of the six analysts forecasts on file at TipRanks. Annualize those numbers and you can see why I am bullish on LPI.