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UPDATE: Topeka Capital Markets Initiates Laredo Petroleum with Buy on Great Value Potential

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In a report published Friday, Topeka Capital Markets analyst Gabriele Sorbara initiated coverage on Laredo Petroleum Holdings (NYSE: LPI) with a Buy rating and $23.00 price target.

In the report, Sorbara noted, “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.

Latest Ratings for LPI

DateFirmActionFromTo
Nov 2017BarclaysMaintainsOverweight
Nov 2017BMO CapitalMaintainsMarket Perform
Sep 2017PiperJaffrayMaintainsOverweight

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Posted-In: Topeka Capital MarketsAnalyst Color Initiation Analyst Ratings

 

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