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Goodrich Petroleum (GDP) a Survivor in the Oil Patch, Imperial Capital Says; New Price Target Calls for 79% Upside

March 4, 2015 11:54 AM EST
Get Alerts GDP Hot Sheet
Price: $23.02 --0%

Rating Summary:
    7 Buy, 15 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 12 | Down: 9 | New: 10
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Shares of Goodrich Petroleum (NYSE: GDP) are down ~4% intra-day Wednesday but one analyst is more bullish on the stock and nearly doubled her price target

Imperial Capital analyst Kim Pacanovsky reiterated an Outperform rating on GDP while raising her one-year price target to $7 from $4. The new target represents 79% potential upside from the recent price.

"GDP management presented several positive developments, including a $100mn second lien financing that, in our opinion, should ensure that GDP survives through 2016, at which time we expect considerably improved crude (and gas) pricing," Pacanovsky said. "Although the recent share raise adds a sizeable 27% to shares outstanding, we believe current shareholders will be rewarded by enhanced liquidity and eliminating the possibility of a firesale of assets. We believe the combination of enhanced liquidity and improving well costs in the TMS means the stock can potentially offer superior return at these levels."

The firm is also raising 2015 and 2016 estimates on lower exploration and G&A expenses. "We are increasing our 2015 EPS estimates to ($1.49) from ($2.00) and our adjusted EBITDAX to $122.1mn from $117.8mn as well as our 2016 EPS estimate to ($1.36) from ($1.88) and our adjusted EBITDAX estimate to $99.4mn from $93.2mn. We have increased our estimates in response to GDP’s decision to run a one rig drilling program, and expect exploration costs to fall significantly. We also expect to see a steep reduction in G&A expenses as service costs continue to decline."

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

Shares of Goodrich Petroleum closed at $3.91 yesterday.



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