Callon Receives a Buy from FBR Capital

By Austin Angelo

FBR Capital analyst Chad Mabry reiterated a Buy rating on Callon (NYSE: CPE) today and set a price target of $20. The company’s shares opened today at $13.33.

Mabry commented:

“Callon Petroleum reported 3Q16 earnings after the close on November 2. The altogether positive update should reverse a recent slump in shares of CPE. The company has been incredibly active this year, but its breakneck pace shows few signs of abating with plans to add a fourth rig in the Midland Basin in 2H17 to drive production guidance of 30 Mboe/d for 2018. Our estimates are heading higher on the accelerated activity and its “Permian premium” multiple no longer looks as rich. We expect the discussion on CPE’s earnings call (this morning at 10:00 Eastern) to focus on its updated development plans. Upcoming operational catalysts include CPE’s next wells at WildHorse and new generation completions at Ranger—each of which could put upward pressure on our NAV-based price target.”

According to, Mabry is ranked 0 out of 5 stars with an average return of -22.2% and a 31.6% success rate. Mabry covers the Basic Materials sector, focusing on stocks such as Atlas Resource Partners L.P. C, Contango Oil & Gas Company, and Mid-Con Energy Partners Lp.

Currently, the analyst consensus on Callon is Strong Buy and the average price target is $18, representing a 35.0% upside.

In a report released yesterday, Canaccord Genuity also reiterated a Buy rating on the stock with a $18 price target.

Based on Callon’s latest earnings report from June 30, the company posted quarterly revenue of $45.15M and quarterly net profit of -$70.1M. In comparison, last year the company earned revenue of $34.32M and had a net profit of -$111.8M.

Based on the recent corporate insider activity of 21 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CPE in relation to earlier this year. Most recently, in January 2016, Joseph Gatto, the SVP of CPE sold 135,546 shares for a total of $1,130,454.

Callon Petroleum Co. engages in the exploration, development, acquisition, and production of oil and natural gas properties. Its operates oil and gas properties in the Permian Basin in West Texas. The company was founded by Sim C. Callon and John S. Callon in 1950 and is headquartered in Natchez, MS.