JPMorgan on Continental Resources (CLR) Go-Private Offer: 'we see the initial offer for CLR as low'
JPMorgan analyst Arun Jayaram comments Continental Resources (NYSE: CLR) writing "Earlier today, the Hamm family made a $70 per share offer to take CLR private. Against this backdrop, we thought it would be helpful to update our valuation data for current prices, with CLR's valuation now at the $70 per share offer price. As a reminder, we published our valuation note last week for the larger cap companies (>$6B) under our integrated oils, refining, and E&P coverage using updated 2022-23 strip prices in order to illustrate the effect of higher commodity prices and crack spreads on valuation. Consistent with our published view, we see the initial offer for CLR as low based on NAV and strip valuation analysis. Please see below for our updated rank orders (company level and sub-sector level) on FCF yield, levered and unlevered FCF/EV yield, EV/DACF, and return of capital yields, all compared to leverage (net debt/EBITDAX). We also provide a table with the key macro assumptions that underlie our strip case."