UPDATE: Stifel Nicolaus Lowers PT to $8.50 on SandRidge Energy on Negative Guidance.
Stifel Nicolaus reiterated its Buy rating on SandRidge Energy (NYSE: SD) while reducing its price target from $10 to $8.50.
Stifel Nicolaus said, “We are reducing our target price from $10 to $8.50 on disappointing initial 2013 guidance that was released yesterday along with better than expected 3Q earnings and plans from the company that it is looking to sell its Permian assets. Bottom line, the guidance is a negative and the Permian asset sale would be a positive. The key issue with the guidance is that oil volumes essentially remain flat from 3Q12 levels, resulting in 10% y/y growth, while gas volumes increase 27% y/y, resulting in full-year growth of 18%. This lower-than-expected growth and the higher gas mix results in our 2013 CFPS estimate reducing meaningfully from $1.72 to $1.39, and we expect consensus numbers, which are sitting at $1.83, to come down as well."
SandRidge Energy closed at $6.10 on Thursday.
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