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UPDATE: Morgan Stanley Reiterates on Bonanza Creek Energy on Superior Growth, Shallower Inventory

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In a report published Friday, Morgan Stanley analyst Drew Venker reiterated an Equal-Weight rating on Bonanza Creek Energy (NYSE: BCEI), and raised the price target from $40.00 to $50.00.

In the report, Morgan Stanley noted, “Despite peer-leading growth, we prefer oil-weighted E&Ps with more visible inventory. We forecast exceptional production growth for BCEI (production CAGR of 30% vs. oil-weighted peers at 23%). However, we estimate that BCEI will drill through its highest quality inventory (Niobrara B) by 2020. BCEI trades at 5.7x 2014e EV/EBITDA vs. oil-weighted peers at 7.5x. We believe this discount is justified given BCEI's shallower inventory and less upside to unrisked NAV vs. peers. We estimate ~50% upside to unrisked NAV, less than our Overweight-rated names CLR at 120% and XEC at 110%. We would like to see deeper drilling inventory before getting more positive on the stock.”

Bonanza Creek Energy closed on Thursday at $46.67.

Latest Ratings for BCEI

DateFirmActionFromTo
Jan 2021KeyBancMaintainsOverweight
Jan 2021KeyBancMaintainsOverweight
Oct 2020KeyBancMaintainsOverweight

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