In a research report released Friday, Canaccord analyst Stephen Berman reiterated a Buy rating on shares of Whiting Petroleum Corp. (NYSE:WLL), while slashing the price target to $11 (from $22), as a result of an increased risk profile. The new price target implies an upside of 180% from current levels.
Berman explained, “WLL reported Q4/15 adjusted EPS/CFPS of $(0.43)/$0.87 vs. our estimates of ($0.35)/$0.99 and consensus of $(0.30)/$1.08. [..] Driving the EPS/CFPS miss were slightly lower than expected realized prices and higher than expected LOE and DD&A, partly offset by lower than expected G&A, production taxes and interest expense.”
Furthermore, “As of December 31, 2015, liquidity was $2.7B, which does not include $500M of additional borrowing base above the $3.5B commitment level. The company ended the year well within all bank/bond covenants and expects to remain in compliance this year. While the borrowing base could go down 20 to 30% in the May 2016 redetermination, the company should still have plenty of liquidity. WLL sold ~$512M of non-core assets in 2015, with more sales likely this year to further enhance liquidity.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Stephen Berman has a yearly average return of -44.1% and a 11.2% success rate. Berman has a -41.8% average return when recommending WLL, and is ranked #3675 out of 3730 analysts.
Out of the 11 analysts polled by TipRanks (in the past 3 months), 4 rate Whiting Petroleum stock a Buy, 7 rate the stock a Hold and 1 recommends a Sell. With a return potential of 144.50%, the stock’s consensus target price stands at $9.56.