PDC Energy - Valuation Adjusted
Posted: Tue Aug 30, 2016 12:54 pm
I have updated my profile on PDC Energy. This may sound weird, but I have lowered my valuation by $5/share to $87.00 even though I feel better about the company today. First Call's price target is $76.58.
PDCE issued more shares for the Permian Basin acquisition that they announced on August 23rd. The dilution lowered their cash flow per share, which impacts my valuation. I actually feel better about PDCE because the new Permian Basin "Core Area" gives it a lot more long-term potential. After the deal closes in the 4th quarter and they raise their production guidance, I will probably feel justified in using a higher multiple of CFPS to value it.
PCDE should also get a boost from the fact that the two initiatives that would have shutdown drilling in Colorado have been kicked out due to not having enough valid signatures.
PDCE has a lot of upside for us. Read the profile carefully and I think you will agree.
PDCE issued more shares for the Permian Basin acquisition that they announced on August 23rd. The dilution lowered their cash flow per share, which impacts my valuation. I actually feel better about PDCE because the new Permian Basin "Core Area" gives it a lot more long-term potential. After the deal closes in the 4th quarter and they raise their production guidance, I will probably feel justified in using a higher multiple of CFPS to value it.
PCDE should also get a boost from the fact that the two initiatives that would have shutdown drilling in Colorado have been kicked out due to not having enough valid signatures.
PDCE has a lot of upside for us. Read the profile carefully and I think you will agree.