CPE stock bounced after Wells Fargo upgraded the stock citing bullishness on Energy, Oil, and Gas sectors.

CPE stock upgraded to Equal Weight from Underweight at Wells Fargo

On November 19, 2021, Wells Fargo analyst Nitin Kumar upgraded CPE stock to Equal Weight from Underweight with a price target of $75, up from $57. Stock reaction to E&P Q3 earnings was muted despite an aggregate free cash flow of $8.7B, up 34% quarter-over-quarter. Still, Kumar tells investors in a research note that while some caution is justified, the long-term investment case for the sector continues to get better. Not only are U.S. shale operators holding onto capital discipline, but they are also adapting their cash return frameworks to support their stock valuations through the cycle by adopting “counter-cyclical” buybacks and special dividends, Kumar adds.

Callon Petroleum price target raised to $77 from $69 at MKM Partners

On November 11, 2021, MKM Partners analyst John Gerdes raised the firm’s price target on CPE stock to $77 from $69 and kept a Buy rating on the shares. The analyst cites the company’s higher NGL price realizations, lower operating expenses, and lower cost-of-capital with increased market capitalization. Callon Petroleum should generate about $2.5B of free cash flow from Q4 of this year through Q2 of 2026, Gerdes adds.

CPE stock price target raised to $70 from $66 at RBC Capital

On November 9, 2021, RBC Capital analyst Scott Hanold raised the firm’s price target on Callon Petroleum to $70 from $66 but kept a Sector Perform rating on the shares after its Q3 earnings beat. The company’s accelerated debt reduction due to improving cash margins and higher commodity prices bring forward the timeline for shareholder return conversations and implementation. The analyst tells investors in a research note, adding that these returns could begin in early to mid-2022. Hanold also raises his FY21 EPS view to $9.00 from $8.40 and FY22 view to $15.02 from $14.77 after Callon’s results.

Callon Petroleum Company Announces Third Quarter 2021 Results

On November 3, 2021, Callon Petroleum Company (NYSE: CPE) reported results of operations for the three and nine months ended September 30, 2021. Callon Petroleum reported Q3 adjusted EPS of $2.93 versus the consensus estimate of $2.52. The company reported Q3 revenue of $503.91M versus the consensus estimate of $425.67M.

CEO Joe Gatto commented, “Our Q3 performance demonstrates Callon’s continued commitment to operational excellence, balance sheet strength, and delivering on our promises to shareholders. Our development program and financial results reflect both strong performance and resilient capital efficiency. The team has been able to mitigate the majority of the inflationary pressures we have seen throughout the year, which has bolstered our top-tier operating margins. The recent rise in commodity prices has been a welcome surprise and has enhanced our free cash flow generation, increasing our estimates for 2021 to over $250M. This increase to bottom-line cash flow will be dedicated to our deleveraging efforts and provides a clear path for Callon to reach our target debt metrics and absolute debt levels much sooner than originally anticipated, opening the door for meaningful discussions regarding shareholders return strategies in the future. Our acquisition of the Primexx assets, coupled with multiple non-core divestitures, has not only improved our balance sheet but will also allow us to expand our scaled model of life-of-field development in our core areas that will preserve long-term inventory quality. With an acreage position of over 186,000 net acres, our future development plans will be primarily focused on our Permian asset base, building upon the efficiency of current operations and delivering synergies from deployment of operational best practices. We have made significant progress integrating the acquired assets into our near-term activity and look forward to sharing more details about our 2022 plans for the broader company in the coming months.”

CPE stock technical analysis

The long term trend is positive and the short term trend is neutral. The long term trend gets the benefit of the doubt for now. CPE has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. There is very little resistance above the current price. There is a support zone below the current price at 53.66, a stop order could be placed below this zone. We notice that large players showed an interest for CPE in the last couple of days, which is a good sign. Sign up for email alerts on when stocks like CPE are a good setup on the chart.

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