At the time of this post VTLE was trading at $47.66, which is less than 2X my 2024 operating cash flow per share forecast of $27.26 (based on the fully diluted share count). TipRanks 2024 forecasts are slightly higher than my 2024. TipRanks CFPS forecasts are $29.69 for 2024 and $30.60 for 2025.
My updated current valuation is $104/share.
The only negative that I see for VTLE is that it does not pay a dividend.
2023 results were outstanding: 17.1% year-over-year production growth, $1.5 billion of revenues, GAAP Net Income of $695 million ($34.32/share), Adjusted Operating Cash Flow of $884.4 million with free cash flow of $217.1 million.
Based on the midpoint of the Company's 2024 guidance, production will increase 23.3% year-over-year to 119,000 Boepd (48% oil, 24.5% NGLs and 27.5% natural gas). Based on my forecast, revenues will exceed $1.8 billion and operating cash flow will exceed $1.0 billion ($27.26/share). Free cash flow should be $350 to $400 million.
The balance sheet is in good shape with no long-term debt due until 2027.
PV10 Net Asset Value of just the Company's Proved Reserves as of 12-31-2023 was $67.65/fully diluted share.
This morning three energy sector analysts submitted updated price targets to TipRanks of $50, $67 and $80.
Vital Energy is a pure play on the Permian Basin. Based on my forecast, it is a "Screaming Takeover Target".
Vital Energy (VTLE) Valuation Update - Feb 22
Vital Energy (VTLE) Valuation Update - Feb 22
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Vital Energy (VTLE) Valuation Update - Feb 22
Dan, any thoughts that Permian could buy Vital?
Re: Vital Energy (VTLE) Valuation Update - Feb 22
Possible, but PR is primarily interested in the Delaware Basin and Vital gets most of its revenues from the Midland Basin.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group