UPDATE: Topeka Capital Markets Initiates Coverage on Laredo Petroleum Holdings with Buy Rating, $23 PT on Great Value Potential

In a report published Friday, Topeka Capital Markets analyst Gabriele Sorbara initiated coverage on Laredo Petroleum Holdings LPI with a Buy rating and $23.00 price target. In the report, Sorbara noted, “We are initiating coverage of Laredo Petroleum Holdings (LPI) with a Buy rating and price target of $23.00 per share. LPI is essentially a Permian pure-play, significantly disconnected from its asset value, due to its stretched (but manageable) balance sheet. We believe the market is failing to realize the valuation its Anadarko Basin assets could garner in a sale, improving the balance sheet and unlocking the NAV upside. Given the tremendous resource base in Wolfcamp/Cline shales, we believe equity is expected and priced in, and is secondary to asset sales, in our view. We see limited downside (relative to our projected proved NAV) and a short squeeze (13.0% short interest) is likely once liquidity is improved. The story may require patience to get the balance sheet in shape and asset value to be realized, but we believe this could evolve sooner than later.” Laredo Petroleum Holdings closed on Thursday at $17.97.