Laredo Petroleum (LPI) PT Update - Oct 17
Posted: Mon Oct 17, 2022 11:46 am
At the time of this post LPI was trading for $65.45.
TipRanks: In the last 3 months, 5 ranked analysts set 12-month price targets for LPI. The average price target among the analysts is $114.80. The 5 price targets range from $83 to $172."
My updated valuation is $153.
As I have posted here many times, LPI has a very low number of shares outstanding (~17.2 million) for a company of this size (~82,000 Boepd). Therefore it has a very wide trading range, which the DayTraders love.
This is why LPI is in the Sweet 16:
> Strong results in 2021: $8.49 EPS and $26.42 operating cash flow per share.
> My forecast for 2022 (very close to TipRanks' forecast) is $21.52 EPS and $49.12 operating cash flow per share.
> LPI is free cash flow positive. FCF this year s/b close to $300 million.
> A high percentage of their 2022 production is hedged for 2H 2022, so oil and gas price changes have very little impact on my valuation.
> Balance Sheet is in good shape and LPI has no near-term debt problems.
> Lots of running room: 8 Years of low-risk HZ drilling locations.
> Stock repurchase program is underway, but debt repayment is the top priority for FCF.
TipRanks: In the last 3 months, 5 ranked analysts set 12-month price targets for LPI. The average price target among the analysts is $114.80. The 5 price targets range from $83 to $172."
My updated valuation is $153.
As I have posted here many times, LPI has a very low number of shares outstanding (~17.2 million) for a company of this size (~82,000 Boepd). Therefore it has a very wide trading range, which the DayTraders love.
This is why LPI is in the Sweet 16:
> Strong results in 2021: $8.49 EPS and $26.42 operating cash flow per share.
> My forecast for 2022 (very close to TipRanks' forecast) is $21.52 EPS and $49.12 operating cash flow per share.
> LPI is free cash flow positive. FCF this year s/b close to $300 million.
> A high percentage of their 2022 production is hedged for 2H 2022, so oil and gas price changes have very little impact on my valuation.
> Balance Sheet is in good shape and LPI has no near-term debt problems.
> Lots of running room: 8 Years of low-risk HZ drilling locations.
> Stock repurchase program is underway, but debt repayment is the top priority for FCF.