UPDATE: Piper Sandler Upgrades Berry Petroleum (BRY) to Overweight

(Updated - April 7, 2022 7:02 AM EDT)

Piper Sandler analyst Mark Lear upgraded Berry Petroleum (NASDAQ: BRY) from Neutral to Overweight with a price target of $14.00 (from $11.00).

The analyst comments "We upgrade BRY to OW from Neutral and raise our PT to $14 (from $11) on our higher crude forecast. BRY introduced a capital return framework in December 2021, and explicitly highlighted its plan to return ~$2/sh to shareholders in base and variable dividends in 2022 assuming $80/bbl Brent. The company will announce its first variable dividend with 1Q22 results which we project at $0.52/sh (base and variable dividend) which equates to a 19.5% annualized cash yield and increases to greater than $1.50/sh in 2H22 at the strip. BRY is a unique player in the small cap E&P universe, differentiated from its shale peers in that low decline assets require significantly less capital to maintain productive capacity. While natural gas drives some upside to operating expenses in 1Q22, the company should benefit from a long-term gas supply contract that starts up in 2Q22 and results in below market gas prices for a majority of its steam generation needs. BRY trades 2.6x/2.2x 2022/23E strip EBITDA and at a 21%/27% FCF/EV yield."

For an analyst ratings summary and ratings history on Berry Petroleum click here. For more ratings news on Berry Petroleum click here.

Shares of Berry Petroleum closed at $10.65 yesterday.

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