Parsley Energy (PE)
Posted: Thu Oct 15, 2015 8:47 pm
Parsley Energy (PE; $17.78-Oct.11; Outperform; PT: $23)
We recently sat down one on one with Parsley CEO Bryan Sheffield and CFO Ryan Dalton. While the company has not formalized 2016 guidance, we came away confident the company will continue to generate >30% production growth over the next few years despite the difficult oil price environment, above current consensus. Moreover, with peer-leading cash flow growth underpinned by a sizable hedge book, we expect the cash outspend to narrow and leverage ratios to improve even with the increase in activity. We also expect more detail on the Southern Delaware Basin prospect, which could generate additional value for the name. We maintain our Outperform rating and a $23/share price target, while modestly increasing our 2016 estimates on higher production levels. — Oppenheimer
Parsley was added to the Sweet 16 on 10/1/2015 with a Fair Value Estimate of $21.40. It looks like the valuation will be going up when I update my model with Q3 results. - Dan
We recently sat down one on one with Parsley CEO Bryan Sheffield and CFO Ryan Dalton. While the company has not formalized 2016 guidance, we came away confident the company will continue to generate >30% production growth over the next few years despite the difficult oil price environment, above current consensus. Moreover, with peer-leading cash flow growth underpinned by a sizable hedge book, we expect the cash outspend to narrow and leverage ratios to improve even with the increase in activity. We also expect more detail on the Southern Delaware Basin prospect, which could generate additional value for the name. We maintain our Outperform rating and a $23/share price target, while modestly increasing our 2016 estimates on higher production levels. — Oppenheimer
Parsley was added to the Sweet 16 on 10/1/2015 with a Fair Value Estimate of $21.40. It looks like the valuation will be going up when I update my model with Q3 results. - Dan