MLV Slashes Price Target For Goodrich Petroleum Corporation After Equity Offering
MLV analyst Chad Mabry came out with a research note on Goodrich Petroleum Corporation (NYSE:GDP), reducing the price target to $5 (from $7), while maintaining a Buy rating. The report follows the news that the company has closed its previously announced public offering of 12 million shares at $4.15 per share. Shares of Goodrich Petroleum closed yesterday at $3.01, up $0.03 or 1.01 percent.
Mabry noted that times are getting desperate for Goodrich Petroleum, as the company is doing its best to ensure its survival through the downturn by announcing a new Second Lien and revising its First Lien in order to improve liquidity.
The equity offering represents dilution of 27% and Mabry is “net positive on the transaction” because it “comes at a steep, but necessary, price to shareholders.” He continued, “We’re forecasting a negligible outspend from Q2’15-Q4’15. By our analysis, GDP’s recent transactions provide sufficient liquidity to undertake its capital plans through 2016.”
Lastly, Mabry noted that GDP’s quarterly declaration of preferred dividends is a positive sign and that the company is on track to finish paying its preferred dividends through 2016.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Chad Mabry has a total average return of -22.5% and a 17.3% success rate. Mabry has a -41.4% average return when recommending GDP, and is ranked #3500 out of 3511 analysts.