Parsley Energy (PE) raised to a BUY

[dan_s]

Stifel has raised PE to a BUY with a $40/share price target. I am taking a hard look at Parsley now and we will publish an updated profile on it this week. My valuation is $34.50, but the company's running room is incredible so I am probably going to increase my valuation. - Dan

"PE announced the acquisition of 9,140 contiguous net acres in Glasscock County, Texas, for $400 million, or
approximately $42,000/acre (excluding the production value). This is the fourth announced acquisition(s) (which have a
cumulative approximate cost of $1.2B) over the past eight months. While the sticker price was higher than PE's previous
acquisitions, we believe the price was fair when factoring in the potential inventory upside. The acquisition
causes us to raise our risked NAV 6%, or $2/share. Additionally, we are also boosting our NAV an additional 11%, or
$4/share, to account for spacing upside potential throughout the company's core Midland and emerging Delaware Basin
assets (now assuming 8 wells/section, up from 6 wells/section). Pro forma the acquisition and changes to our inventory
assumptions, we are raising our NAV and target price 18% to $40/share. We continue to believe PE is well
positioned to outperform 2017 growth expectations while maintaining a strong balance sheet."

[sansonetx]

The apple doesn't fall far from the tree.His Dad is CEO of Pioneer.There might be interesting conversations around the Thanksgiving day table.

[wilmawatts]

Analyst Actions: Imperial Capital Reiterates Parsley Energy Outperform Rating; Lifts PT to $42 from $40

[dan_s]

My valuation has increased to $38.60/share. We will send out an updated profile on PE late today.

Note that my valuation is based on a much lower valuation of operating cash flow than what Diamondback Energy (FANG) trades at today. Parsley is growing production much faster than Diamondback. Parley's production exit rate should surpass Diamondback's exit rate on 12-31-2016.

[wilmawatts]

Sweet. I like what I see here.