Energy Prospectus

At the time of this post LPI was trading at $67. Keep in mind that this is a Super High Beta stock that has big price swings because it has so few shares outstanding (17.3 million and on decline because of their stock repurchase program that is underway).

I have updated my forecast/valuation model for Q2 results and fresh guidance, but my valuation stays the same at $152/share.

TipRanks: "In the last 3 months, 6 ranked analysts set 12-month price targets for LPI. The average price target among the analysts is $130.67. The six price targets range from $102 to $172. On 8-2-2022 Piper Sandler analyst Mark Lear raised the price target on Laredo Petroleum (NYSE: LPI) to $120.00 (from $117.00) while maintaining an Overweight rating."

Laredo did lower the high end of their production guidance for 2022. They now expect to produce 82.0 to 83.5 MBoepd this year, which is a slight increase over 2021. The growth is fully funded by their operating cash flow ($800 to $850 million in 2022). FCF from operations s/b $250 to $300 million.

Most of their Bad Hedges expire at year-end, so 2023 should be big year for LPI. < TipRanks' Earnings Per Share forecast for 2023 is $45.42!

Laredo cut their production forecast due to bad wells. From the conf call

At the end of the second quarter, we turned into line a six-well package the leach wells consisting of six 15,000-foot wells in our most southeastern unit in Howard County. These wells are still in the flow light stage. The oil production ramp has taken much longer than the offset wells and the wells are underperforming our prior forecast.

They cut realizations too:

WTI for the remainder of the year is now expected to be approximately $280 million versus prior projections of $350 million.

The name was hammered last week. Wondering out loud if the lower forecast helped knock it lower

Laredo will be fine as they are still on pace for free cash flow of approximately $300 million. Production was up from Q1 to Q2, but may be down a bit in Q3. Exit rate should be over 80,000 Boepd. Big cash flow increase coming in Q1 2023 as the really "Bad Hedges" expire at year-end.

TipRanks' operating cash flow per share forecast for 2023 is $65.51 at the time of this post. Yes, that is PER SHARE.

LPI is a HIGH BETA stock because of such a low number of shares. The Day Traders are working this one.