Jefferies Raises Price Target on St. Mary's (SM), Forecasts Strong 2012 Growth
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Price: $37.20 -1.17%
Rating Summary:
23 Buy, 15 Hold, 2 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
23 Buy, 15 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is maintaining its Hold rating on shares of St. Mary's (NYSE: SM), but is raising its price target from $64 to $73.
The firm believes that SM will release its 2012 outlook and its revised 2011 pro forma due to the recent joint venture soon. It forecasts that the joint venture will increase total capex by roughly 10 percent, $200-$250 million ahead of cash flows. 2012 budget should be slightly high from $1.08 billion in 2011 to $1.2 billion.
Jefferies estimates 18 percent production growth with strong Eagle Ford and Bakken growth offsetting flattish volumes in other areas. The firm highlights that growth may reach 25 percent with no takeaway restrictions.
In 2012, Jefferies anticipates that Eagle Ford's capex along will spike 50 percent. The firm believes that it will reach $760 million as SM employs 6 rigs next year against an average of 4 in 2011. It also forecasts that the company will drill 105 wells in 2012 at $7 million a peace, 35 more than in 2011.
An analyst at Jefferies comments, "We expect higher Bakken spending to absorb flat-to-declining commitments for the Permian, Midcontinent and ArkLaTex. We suspect that only the Bakken is being managed for growth. Permian and ArkLaTex in “maintenance” mode, while the Midcon is a source of funds."
For more ratings news on St. Mary\'s click here and for the rating history of St. Mary\'s click here.
Shares of St. Mary\'s closed at $74.01 yesterday.
The firm believes that SM will release its 2012 outlook and its revised 2011 pro forma due to the recent joint venture soon. It forecasts that the joint venture will increase total capex by roughly 10 percent, $200-$250 million ahead of cash flows. 2012 budget should be slightly high from $1.08 billion in 2011 to $1.2 billion.
Jefferies estimates 18 percent production growth with strong Eagle Ford and Bakken growth offsetting flattish volumes in other areas. The firm highlights that growth may reach 25 percent with no takeaway restrictions.
In 2012, Jefferies anticipates that Eagle Ford's capex along will spike 50 percent. The firm believes that it will reach $760 million as SM employs 6 rigs next year against an average of 4 in 2011. It also forecasts that the company will drill 105 wells in 2012 at $7 million a peace, 35 more than in 2011.
An analyst at Jefferies comments, "We expect higher Bakken spending to absorb flat-to-declining commitments for the Permian, Midcontinent and ArkLaTex. We suspect that only the Bakken is being managed for growth. Permian and ArkLaTex in “maintenance” mode, while the Midcon is a source of funds."
For more ratings news on St. Mary\'s click here and for the rating history of St. Mary\'s click here.
Shares of St. Mary\'s closed at $74.01 yesterday.
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