Energy Prospectus

TipRanks: "On August 4th JPMorgan analyst Zack Parham raised the price target on Callon Petroleum (NYSE: CPE) to $58.00 (from $54.00) while maintaining a Neutral rating."

CPE closed at $36.75 on August 4th. I am always amazed when a respected analyst puts a price target that is more than 50% above the current share price and then does not rate it a BUY. It tells me that Zack must not trust his own valuation model.

My current valuation of CPE is $84.50.

Callon Petroleum Company (CPE, $35.91, Buy) - Stable
Operations Leads to Strong 2024 - Following up on Callon’s
earnings call we are adjusting our estimates slightly to better
reflect the pace of activity through YE23 which we now expect
will form a more pronounced recovery in early ’24 than previously
modeled. We believe the type of recovery sets the company up
for a 2024 that could increase record cash flow allowing CPE
many financial options. We currently forecast the company to
generate 2H23 FCF of ~$170mm that could result in ~$85mm of
share repurchases under the current formula, or a reduction to
the share count of ~3%. We are reiterating our PT of $48. -
Neal Dingmann, Truist Financial

I expect WTI to go to $90 by end of Sept. If so, CPE should set a new 52-week high.

Note from RBC Capital 8/9

Rating: Outperform
Price Target: 50.00
Our view: The recent transactions that scaled its Permian position and transitioned
CPE to a pureplay Permian operator were pivotal to reaching leverage targets,
focusing operations, and initiating its shareholder return plan. 3Q23 will be
somewhat transitional given a few logistical delays, but 4Q23 should set the stage
for a good trajectory into 2024. Operationally, promising early results from 3rd Bone
Spring provide upside to core inventory. We think CPE can simultaneously achieve
both debt reduction and buyback targets by mid-2025 at current strip commodity
prices.