Analysts from BMO Positive on Laredo Petroleum Following Investor Meeting

Following Laredo Petroleum Inc

investor meeting, BMO Capital Markets analyst, Donnell, remained positive on the company. The brokerage rated the stock as ‘Market Perform' and kept a price objective of $12.00 on the company's shares. "We walked away from time spent with management incrementally positive on the LPI story, seeing more clearly a path to potentially greater capital efficiency, stronger cash margins, and a more predictable growth profile. No surprise that the increase in early rates on certain Wolfcamp and Cline producers - and the potential for higher EURs - was the focus, whether that increase is primarily a result of the company's Earth Model or optimized completions (more sandpumped) or both," the analyst said in his research note. Donnel pointed out some of the chief takeaways after the investor meeting. The first one is that he sees the second quarter production guidance increasing following the 1Q beat. The analyst believes that the revision would be in line with his original estimation. Its investments made to date in infrastructure should lead to greater reductions in operating costs (and capital costs), potentially driving better margins. The analyst said, "We rate LPI Market Perform. We show the shares trading at 10.0x our 2016 EBITDA estimate, moving to 12.5x in 2017 and 9.2x in 2018 on 2% and 14% equivalent production growth, respectively…. We are raising our NAV-based price target to $12." The stock traded 2.25 percent up on Wednesday.