Callon Petroleum (CPE) Price Target - Aug 10
Posted: Wed Aug 10, 2022 10:37 am
Note below is from Scott Hanold at RBC Capital Markets
Callon Petroleum Company (NYSE: CPE; 36.82)
Published August 9 2022 15:33:58 EDT
Rating: Outperform
Price Target: 72.00 ↓ 75.00
"Quiet Before the Storm"
Our view: Last week, CPE posted a soft 2Q22 print reflecting transitory issues
that have weighed on investor sentiment. Lower oil production was largely an
effort to accelerate workovers that should improve productivity and reliability
moving forward. Initial indications are positive, but the market may need some
confirmation.
The balance sheet is improving and trending to a 1.0x leverage ratio and $2b
of debt by around YE22. These are milestones to initiate shareholder-returns. Our
model update resulted in lower EPS/CFPS estimates accounting for reduced oil
production and higher operating costs. We also reduced our target by $3/share to
$72.
Callon Petroleum Company (NYSE: CPE; 36.82)
Published August 9 2022 15:33:58 EDT
Rating: Outperform
Price Target: 72.00 ↓ 75.00
"Quiet Before the Storm"
Our view: Last week, CPE posted a soft 2Q22 print reflecting transitory issues
that have weighed on investor sentiment. Lower oil production was largely an
effort to accelerate workovers that should improve productivity and reliability
moving forward. Initial indications are positive, but the market may need some
confirmation.
The balance sheet is improving and trending to a 1.0x leverage ratio and $2b
of debt by around YE22. These are milestones to initiate shareholder-returns. Our
model update resulted in lower EPS/CFPS estimates accounting for reduced oil
production and higher operating costs. We also reduced our target by $3/share to
$72.