In a research report released Tuesday, Roth Capital analyst Joe Reagor maintained a Buy rating on Magellan Petroleum Corporation (NASDAQ:MPET) but reduced the price target to $1.75 (from $3.75), which still implies an upside of 106% from current levels.
The report follows the company’s fiscal second-quarter results, posting revenue of $1.3 million and an EPS loss of $0.07 per share that were essentially in-line with Roth’s estimates.
Reagor observed, “Since our last update on MPET in December, oil prices have fallen further and we have revised our nearterm and long-term oil forecasts. Based on this revised oil outlook we believe it is necessary to revise our valuation metrics for MPET’s key assets. We have cut our valuations from $0.21 per share for existing production, $0.84 for MPET’s UK acreage, $2.24 for Poplar, and $0.20 for offshore Australia to $0.12, $0.17, $1.31, and $0.07, respectively. Thus, the majority of our valuation for MPET is now assigned to Poplar as we view its other assets as longer-term opportunities in the current oil environment.”
The analyst added, “Based on our revised valuations of MPET’s key assets, we are cutting our price target to $1.75. However, we continue to believe MPET’s poplar asset holds significant potential despite lower oil prices.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joe Reagor has a total average return of -1.6% and a 42.4% success rate. Reagor has a -43.1% average return when recommending MPET, and is ranked #2905 out of 3476 analysts.