Jefferies Maintains a 'Hold' on Continental Resources (CLR); Excellent Execution at a Very Steep Price
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Price: $74.27 --0%
Rating Summary:
19 Buy, 24 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 5 | New: 25
Rating Summary:
19 Buy, 24 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 5 | New: 25
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Jefferies maintains a 'Hold' on Continental Resources (NYSE: CLR) price target raised from $70 to $81.
Analyst, Subash Chandra, said, "It is difficult being on the sidelines for an ambitious Bakken player executing as seamlessly as Continental. We’ve been an early proponent of the company and a big fan of the Bakken since the initial horizontals were completed in N Dakota. But we believe our pv10-based valuation approach has some merit. And that approach suggests all the good news coming forth is already paid up in today’s share price. Evidently a liquids-rich, beat/raise story is hard to hold back in this oil tape. But the momentum can stall just as quickly if oil prices revert to our ’12 outlook of $95 and long-term view of $85. Based on the math we demonstrate below, today’s value is difficult to embrace. We acknowledge however, the evidence of improved well productivity in q4 results. As a result, we estimate ’12E growth at 40%, the high end of the range."
"The reasons for the (price target) raise are 1) rolling to ’13 reserve expectations from ’12 and 2) increasing the reserve growth outlook to 24% in ’12 from 14%, establishing ’13 growth of 21%." (Jefferies also raises FY12 EPS estimate from $3.49 to $3.78)
For an analyst ratings summary and ratings history on Continental Resources click here. For more ratings news on Continental Resources click here.
Shares of Continental Resources closed at $94.93 yesterday.
Analyst, Subash Chandra, said, "It is difficult being on the sidelines for an ambitious Bakken player executing as seamlessly as Continental. We’ve been an early proponent of the company and a big fan of the Bakken since the initial horizontals were completed in N Dakota. But we believe our pv10-based valuation approach has some merit. And that approach suggests all the good news coming forth is already paid up in today’s share price. Evidently a liquids-rich, beat/raise story is hard to hold back in this oil tape. But the momentum can stall just as quickly if oil prices revert to our ’12 outlook of $95 and long-term view of $85. Based on the math we demonstrate below, today’s value is difficult to embrace. We acknowledge however, the evidence of improved well productivity in q4 results. As a result, we estimate ’12E growth at 40%, the high end of the range."
"The reasons for the (price target) raise are 1) rolling to ’13 reserve expectations from ’12 and 2) increasing the reserve growth outlook to 24% in ’12 from 14%, establishing ’13 growth of 21%." (Jefferies also raises FY12 EPS estimate from $3.49 to $3.78)
For an analyst ratings summary and ratings history on Continental Resources click here. For more ratings news on Continental Resources click here.
Shares of Continental Resources closed at $94.93 yesterday.
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