Vitel Energy (VTLE) Valuation Update - Feb 22
Posted: Wed Feb 22, 2023 9:31 am
VTLE closed at $47.22 yesterday. I am increasing my valuation by $6 to $126/share.
Vitel Energy reported strong Q4 results and they provided updated guidance after the market closed yesterday.
> Q4 results adjusted to reflect the declining share count: $$121.3 million reported net income, $7.05/share.
> Full year 2022 results: $631.5 million net income, $37.67/share and $800.5 million adjusted operating cash flow, $47.75/share.
> "Adjusted Net Income" (without non-cash mark-to-market gain on hedges) was $444.1 million, $26.49/share.
My forecasts:
> 2023 Net Income of $355.6 million, $21.55/share and $744.7 million operating cash flow, $45.13/share.
> 2024 Net Income of $447.0 million, $27.42/share and $792.9 million operating cash flow, $48.64/share.
TipRanks: "In the last 3 months, 5 ranked analysts set 12-month price targets for VTLE. The average price target among the analysts is $75.00. Stifel Nicolaus analyst Derrick Whitfield maintained a Buy rating on Vital Energy yesterday and set a price target of $133.00."
My only concern is the quality of Vital's "running room" because their production guidance for 2023 (if accurate) is ~9% decline year-over-year. They do expect to close the "Driftwood Acquisition" in April, which should give them a production boost.
My updated valuation model will be posted to the EPG website late this morning.
Vitel Energy reported strong Q4 results and they provided updated guidance after the market closed yesterday.
> Q4 results adjusted to reflect the declining share count: $$121.3 million reported net income, $7.05/share.
> Full year 2022 results: $631.5 million net income, $37.67/share and $800.5 million adjusted operating cash flow, $47.75/share.
> "Adjusted Net Income" (without non-cash mark-to-market gain on hedges) was $444.1 million, $26.49/share.
My forecasts:
> 2023 Net Income of $355.6 million, $21.55/share and $744.7 million operating cash flow, $45.13/share.
> 2024 Net Income of $447.0 million, $27.42/share and $792.9 million operating cash flow, $48.64/share.
TipRanks: "In the last 3 months, 5 ranked analysts set 12-month price targets for VTLE. The average price target among the analysts is $75.00. Stifel Nicolaus analyst Derrick Whitfield maintained a Buy rating on Vital Energy yesterday and set a price target of $133.00."
My only concern is the quality of Vital's "running room" because their production guidance for 2023 (if accurate) is ~9% decline year-over-year. They do expect to close the "Driftwood Acquisition" in April, which should give them a production boost.
My updated valuation model will be posted to the EPG website late this morning.