Oppenheimer analyst Tim Rezvan maintained a Buy rating on Callon (CPE) today and set a price target of $13. The company’s shares closed yesterday at $7.79.
Rezvan commented:
“We believe CPE shares should outperform on Tuesday following the announced sale of Callon’s Ranger asset after the close Monday. The sale is a bold move to turn declining production and non-core inventory into cash that augments deleveraging and FCF generation aspirations. Selling 9.7% of production (6.8% of oil production) lowers EBITDA and CF, but drives incremental deleveraging and lowers cash opex, given Ranger’s slightly higher LOE. We trim estimates to reflect the sale, and also adjust our 2019 capex cadence and lower natural gas realization assumptions for 1H19. We maintain our Outperform rating and $13 PT into 1Q19 earnings in early May, when we expect to receive updated 2019 guidance.”
According to TipRanks.com, Rezvan is a 3-star analyst with an average return of 2.3% and a 55.3% success rate. Rezvan covers the Basic Materials sector, focusing on stocks such as Whiting Petroleum Corp, Gulfport Energy Corp, and Occidental Petroleum.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Callon with a $11.11 average price target.
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Based on Callon’s latest earnings release for the quarter ending December 31, the company reported a quarterly net profit of $156 million. In comparison, last year the company had a net profit of $55.76 million.
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Callon Petroleum Co. engages in the exploration, development, acquisition, and production of oil and natural gas properties. It focuses on unconventional oil and natural gas reserves in the Permian Basin. The company was founded by Sim C. Callon and John S. Callon in 1950 and is headquartered in Houston, TX.
