Market Overview

Imperial Capital Sees Bill Barrett Driving 'Considerable' EBITDA Growth

Share:

Bill Barrett Corporation (NYSE: BBG), an independent energy company that develops, acquires and explores for oil and natural gas resources in the DJ Basin of Colorado, could see its stock move higher by 75 percent, according to analysts at Imperial Capital.

The Analyst

Imperial Capital's Jason Wangler upgraded Bill Barrett's stock from In-Line to Outperform with a price target boosted from $6 to $9.

The Thesis

The bullish case for owning Bill Barrett's stock is mostly due to its pending acquisition of Fifth Creek Energy, Wangler said in a note. Specifically, the acquisition is likely to result in incremental production, cash flow growth and an increase in future drilling inventory.

Over the long-term, Bill Barrett has nearly 3,000 gross undeveloped locations that boast good economics, the analyst said. This should satisfy s Bill Barrett's continued growth beyond 2019 as it could provide approximately 15 years of drilling inventory. Given a now "better understanding" of the company's activity, coupled with the potential from its Niobrara assets in the future could result in a "considerable" EBITDA growth of three-fold by 2019 from 2017's levels.

The company's cash balance of around $300 million as of the end of 2017 should be sufficient to allow for an "oustpend" year in 2018, but the amount of spending will narrow into 2019 which will help keep leverage low.

Price Action

Shares of Bill Barrett were trading higher by around 2 percentat $5.28.

Related Links:

Mid-Morning Market Update: Markets Open Lower; Bristol-Myers Profit Tops Expectations

Benzinga Pro's 5 Stocks To Watch Today

Latest Ratings for BBG

DateFirmActionFromTo
Mar 2018Initiates Coverage OnBuy
Feb 2018UpgradesIn-LineOutperform
Dec 2017MaintainsEqual-Weight

View More Analyst Ratings for BBG
View the Latest Analyst Ratings

Posted-In: Colorado DJ Basin energy imperial capitalAnalyst Color Upgrades Price Target Analyst Ratings

 

Related Articles (BBG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
XELMaintains60.0
SOMaintains54.0
SREMaintains141.0
EXCMaintains56.0
ESMaintains77.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Bitcoin Bull Doubles Down As Crypto Continues To Slide

Wells Fargo Says Buy The PayPal Dip