FBR Capital Raises Price Target on Callon Petroleum (CPE) to $19 Following Acquisition
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FBR Capital reiterated an Outperform rating on Callon Petroleum (NYSE: CPE), and raised the price target to $19.00 (from $17.00), following the company's acquisition of the Midland Basin. The purchase expands the company's WildHorse operating area in Howard County by 5,667 net acres and 112 net locations for total consideration of $327M.
Analyst Chad Mabry commented, "We are raising our price target on shares of Callon Petroleum to $19 (from $17) following another attractive acquisition within its wheelhouse of the Midland Basin. The stock has been a big winner with year-to-date and quarter-to-date gains of 86% and 38%, respectively, compared to corresponding gains of 29% and 12% for the XOP. The outperformance is all the more impressive as it has occurred in conjunction with three equity offerings, combining for dilution of 100%. However, the company continues to strengthen its portfolio with each deal, and we believe it remains positioned to outperform based on best-in-class assets and execution, peer-leading production and cash flow growth, and a strong balance sheet."
Shares of Callon Petroleum closed at $15.54 yesterday.
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