|Bid||8.80 x 1200|
|Ask||8.81 x 900|
|Day's Range||8.70 - 8.92|
|52 Week Range||7.92 - 26.67|
|Beta (3Y Monthly)||2.17|
|PE Ratio (TTM)||1.39|
|Earnings Date||Nov 4, 2019 - Nov 8, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||15.66|
Carrizo (CRZO) delivered earnings and revenue surprises of 2.90% and 0.46%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?
Carrizo Oil & Gas, Inc. today announced the Company’s financial results for the second quarter of 2019 and provided an operational update. Highlights include:
NEW ORLEANS , Aug. 2, 2019 /PRNewswire/ -- Former Attorney General of Louisiana Charles C. Foti, Jr., Esq. and the law firm of Kahn Swick & Foti, LLC ("KSF") are investigating the proposed sale ...
Callon Petroleum (NYSE:CPE), having declined by 58% in the last 12-months, has been a clear under-performer. The acquisition announcement of Carrizo Oil & Gas (NASDAQ:CRZO) has not changed my bearish long-term view on the stock. However, I do believe that there can be a possible trading bounceback in the near-term.Source: Shutterstock The focus of this article will be on the key concerns that make Callon Petroleum stock unattractive for long-term exposure even after a deep correction. CPE's Debt and Cash FlowsOn a standalone basis, Callon Petroleum reported total debt of $1,330 million as of the first quarter of 2019 (1Q19). For the same period, Carrizo Oil & Gas reported debt of $1,715 million. For the combined entity, the total debt therefore stands at $3 billion.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFurther, with LTM EBITDA of $1.2 billion, the leverage currently stands 2.5. With both companies generating negative free cash flow, it is likely that the total debt will continue to increase in the coming quarters. * 8 of the Most Shorted Stocks in the Markets Right Now Therefore, an increase in leverage is a concern for Callon Petroleum and CPE stock. My focus is on debt and debt servicing as the global economy has decelerated. Expansionary monetary policies can ensure that oil does not trend meaningfully lower. However, $50 to $60 oil is unlikely to be enough for Callon Petroleum to generate positive free cash flows. The Permian Concerns for CPE StockCallon Petroleum indicated in the merger presentation that the company expects free cash flow to break even at $50 per barrel of oil. I am of the opinion that the estimates are optimistic.Besides expected oil price weakness, the key reason is the company's Permian assets. The Permian shale-well production has been falling off at a steep rate. It is clear from EIA data that production growth has been relatively muted in the Permian. In addition, legacy oil production change has trended steeply lower.The implication is that shale producers need to invest more to maintain production. Therefore, capital expenditure can be higher than expected which implies a negative impact on free cash flows.Infrastructure bottleneck at the Permian is another challenge that is likely to sustain through 2019 and potentially into 2020. It is worth noting that the company's realized oil price for 1Q18 was $53.3 and declined to $42.18 for 1Q19. Once new pipelines are operational, realized price is likely to trend higher. That is still few quarters away. The Positive Triggers for Callon Petroleum StockIn April 2019, Callon Petroleum entered into an agreement for divestment of non-core asset in the Midland Basin for a consideration of $260 million. Post-acquisition of Carrizo Oil & Gas, the company will be looking at divest other non-core assets. This can be a potential source of cash that can be used to deleverage. However, I believe that the markets will wait for any such positive trigger before CPE stock trends higher.Another obvious trigger for CPE stock trending higher will be upside in oil prices. The company's production is weighted towards oil and higher realization would imply EBITDA margin expansion and free cash flow visibility. However, economic headwind is a near-term concern and it remains to be seen if expansionary policies trigger sharp upside in oil price.It is also important to note that the PV10 for the combined entity is approximately $7 billion. Callon Petroleum and Carrizo Oil & Gas have a current combined market capitalization of nearly $2 billion. Even if total debt of $3 billion is considered, the company is undervalued considering the resource base valuation.This valuation gap will fill only when Callon Petroleum demonstrates the ability to sustain production growth and turn free cash flow positive. Investors need to remain in the sidelines for these triggers to actualize before moving on CPE stock. Concluding Words on CPE StockBefore the acquisition, Callon Petroleum stock was a pure play in the resource-rich Permian Basin. CPE stock still trended lower on Permian-specific concerns that I outlined. With the acquisition of Carrizo Oil & Gas, the company is not more diversified in terms of asset base.Callon Petroleum needs to demonstrate that the acquisition does bring in benefits in terms of size and scale. In addition, the company needs to focus on deleveraging and turning free cash flow positive.Until then, Callon Petroleum stock is a good trading stock and I believe that current levels are attractive for medium-term exposure.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 of the Most Shorted Stocks in the Markets Right Now * 7 Charts That Should Concern Marijuana Stock Investors * 8 Monthly Dividend Stocks to Buy for Consistent Income The post Callon Petroleum Stock: Trade, Wait for Positive Long-Term Triggers appeared first on InvestorPlace.
Carrizo (CRZO) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
NEW YORK , July 26, 2019 /PRNewswire/ -- Anheuser-Busch Companies, LLC (BUD) Lifshitz & Miller announces investigation into possible securities laws violations in connection with Anheuser-Busch's deleveraging ...
The U.S. government’s new holding facility for migrant youth will close as early as this week, less than one month after it was opened in response to the squalid conditions in which children were being detained by the Border Patrol, according to the nonprofit operating the facility. The last children at the camp at Carrizo Springs, Texas, are on track to leave by Thursday, said Kevin Dinnin, the CEO of the nonprofit BCFS. The U.S. Department of Health and Human Services opened the facility in late June.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
NEW YORK , July 19, 2019 /PRNewswire/ -- Juan Monteverde , founder and managing partner at Monteverde & Associates PC , a national securities firm headquartered at the Empire State Building in New York ...
In view of Callon Petroleum's (CPE) already weak financials, the company's decision to pay a premium with shares to assume Carrizo's debt load and scattered assets gets tepid response from investors.
The Zacks Analyst Blog Highlights: Callon Petroleum, Carrizo Oil & Gas, McDermott International and Occidental Petroleum
NEW YORK , July 16, 2019 /PRNewswire/ -- WeissLaw LLP is investigating possible breaches of fiduciary duty and other violations of law by the Board of Directors of Carrizo Oil & Gas, Inc. ("CRZO" ...
WILMINGTON, DE / ACCESSWIRE / July 16, 2019 / Rigrodsky & Long, P.A.: Do you own shares of Carrizo Oil & Gas, Inc. (NASDAQ GS: CRZO )? Did you purchase any of your shares prior to July 15, 2019? Do you ...
Shale producer Callon Petroleum (CPE) agreed to buy smaller E&P player Carrizo Oil & Gas (CRZO) for $3.2 billion, while McDermott International (MDR) clinched twin contracts from Saudi Aramco.
Shares of Carizzo Oil & Gas are rising 2.6% Tuesday afternoon as investors digest the company's acquisition by Callon Petroleum for $3.2 billion, or $13.12 per share. The combined company will have "scaled development operations across a portfolio of core oil-weighted assets in both the Permian Basin and Eagle Ford Shale," the companies said in a statement. Callon shareholders will hold 54% of the combined company once the deal closes with Carrizo shareholder holding the remaining 46%.
NEW YORK, July 16, 2019 -- The following statement is being issued by Levi & Korsinsky, LLP: To: All Persons or Entities who purchased Carrizo Oil & Gas, Inc..
Callon Petroleum (CPE) can lose its pure-play Permian status with the acquisition of Carrizo's Eagle Ford shale play properties.
The latest Permian Basin play is a ‘merger of equals’ between Callon Petroleum and Carrizo Oil & Gas, the first after Chevron Corp. lost out in the battle for Anadarko Petroleum Corp.