Northern Oil & Gas (NOG) Update - Nov 6

[dan_s]

NOG was trading at $40.17 when this was posted.

I have updated my forecast/valuation model for their good Q3 results and updated guidance.
My valuation has been increaed by $1.00 to $56.00.
> Operating cash flow beat my forecast despite lower production.
> I increased the valuation multiple by 0.25 to 4.00 X annualized operating cash flow per share.
> NOG pays a decent dividend (~4.2% yield) and it has double digit annual production growth locked in.
> I like the production mix (~60% crude oil & ~40% natural gas + NGLs that it reports on a combined basis).

I do think a Trump presidency will increase the valuation multiples the Wall Street Gang uses for this sector, since he will be more friendly to the industry that supports our standard of living. A common sense energy plan is not going to be based on wind & solar.

TipRanks: "In the last 3 months, 9 ranked analysts set 12-month price targets for NOG. The average price target among the analysts is $44.36. The 9 price targets range from $39 to $49." Three analysts updated their price targets this morning to $40, $46 and $49.