Noble Financial Lowers Callon Petroleum (CPE) to Hold; Premium Warranted, But Pullback Expected

Noble Financial cuts Callon Petroleum (NYSE: CPE) from Buy to Hold as the stock recently exceeded the firm's $8.25 price target by a significant amount.

Analyst Philip Dodge noted:

• The enterprise value multiple is 6.1x, or the same as the average for a peer group of 26 E&P companies, and the debt to EBITDA ratio is also similar at about 2x
  
  
• In our opinion, Callon has demonstrated the valuation benefits of evolving from a Gulf Coast exploration company to a focused Permian Basin developer; and
  
  
• The current stock price at least partly reflects the outlook for 120% growth in Permian Basin production in 2014.

Despite Dodge's continued bullishness on the stock, he thinks it might be best to wait for a pullback before jumping in.

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

Callon Petroleum closed at $8.48 yesterday.

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