QEP is a Strong Candidate for the Sweet 16
Posted: Thu Oct 15, 2015 8:51 pm
QEP Resources (QEP; $16.21-Oct.9; Market Perform-Range: $40-$44)
Late last week we hosted QEP Resources management for meetings on the West Coast. Overall, we think QEP is squarely in the survivor camp given its asset base, cash position ($450MM), and untapped unsecured revolver. Recent Bakken (high density) results offer significant upside potential to both Antelope EURs and location counts, QEP has just started developing its Permian position, Pinedale and Haynesville provide gas optionality, and company continues to be active in looking for a meaningful acquisition in either a core play or even a new basin. We have updated our model for QEP to reflect our current views and new price deck in our 10/12 note, "E&P: Holding Pattern Until Fog Clears." — Wells Fargo
We will be sending out a profile on QEP this week. I met with them at EnerCom and I was very impressed. This one is grossly oversold as you can tell from Wells Fargo's price target of $40. This is a large-cap with a strong balance sheet and on-track for $850 million in cash flow from operations this year. They are actively hunting for takeover targets. - Dan
Late last week we hosted QEP Resources management for meetings on the West Coast. Overall, we think QEP is squarely in the survivor camp given its asset base, cash position ($450MM), and untapped unsecured revolver. Recent Bakken (high density) results offer significant upside potential to both Antelope EURs and location counts, QEP has just started developing its Permian position, Pinedale and Haynesville provide gas optionality, and company continues to be active in looking for a meaningful acquisition in either a core play or even a new basin. We have updated our model for QEP to reflect our current views and new price deck in our 10/12 note, "E&P: Holding Pattern Until Fog Clears." — Wells Fargo
We will be sending out a profile on QEP this week. I met with them at EnerCom and I was very impressed. This one is grossly oversold as you can tell from Wells Fargo's price target of $40. This is a large-cap with a strong balance sheet and on-track for $850 million in cash flow from operations this year. They are actively hunting for takeover targets. - Dan