Laredo Petroleum Shares Trading Near Williams Capital Price Target, Initiated At Hold

Williams Capital initiated coverage on Laredo Petroleum Inc LPI with a Hold rating and $14 price target.

According to the analysts, Laredo is a Midland Basin pure-play, significantly disconnected from its net asset value, due to its above-average financial leverage and below average EBITDA/production growth.

"With approximately 130,000 net acres in Glasscock/Reagan County in the Midland Basin, the company holds significant running room with four key zones (Wolfcamp A, B, C and Cline)," the analysts wrote

The company's shares are trading at 11.6x and 9.1x for 2017 and 2018 on an EV/EBITDA basis. The $14 price target implies 2017 and 2018 EV/EBITDA metrics of 12.5x and 9.8x, respectively.