There is no way Laredo Petroleum Inc. (LPI) can keep these numbers up

Laredo Petroleum Inc. (NYSE: LPI) stock fell -2.63% on Wednesday to $62.94 against a previous-day closing price of $64.64. With 0.37 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.7 million shares. During the session, the Oil & Gas E&P company that operates in wider Energy sector, reached to the highest price of $64.23 whereas the lowest price it dropped to was $61.83. The 52-week range on LPI shows that it touched its highest point at $120.86 and its lowest point at $51.22 during that stretch. It currently has a 1-year price target of $85.50. Beta for the stock currently stands at 3.37.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of LPI was down-trending over the past week, with a drop of -3.85%, but this was down by -0.30% over a month. Three-month performance dropped to -21.84% while six-month performance fell -11.04%. The stock lost -5.28% in the past year, while it has gained 4.67% so far this year. A look at the trailing 12-month EPS for LPI yields 42.70 with Next year EPS estimates of 30.86. For the next quarter, that number is 4.49. This implies an EPS growth rate of 113.40% for this year and 34.00% for next year. EPS is expected to grow by 10.49% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 19.50%.

Float and Shares Shorts:

At present, 16.65 million LPI shares are outstanding with a float of 15.71 million shares on hand for trading. On Oct 13, 2022, short shares totaled 1.9 million, which was 11.10% higher than short shares on Sep 14, 2022. In addition to Mr. Mikell Jason Pigott as the firm’s Pres, CEO & Director, Mr. Bryan J. Lemmerman serves as its Sr. VP & CFO.

Institutional Ownership:

Through their ownership of 80.29% of LPI’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 45.85% of LPI, in contrast to 35.80% held by mutual funds. Shares owned by individuals account for 15.33%. As the largest shareholder in LPI with 15.11% of the stake, BlackRock Fund Advisors holds 2,584,942 shares worth 2,584,942. A second-largest stockholder of LPI, SSgA Funds Management, Inc., holds 1,725,030 shares, controlling over 10.09% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in LPI, holding 1,120,107 shares or 6.55% stake. With a 7.63% stake in LPI, the SPDR S&P Oil & Gas Exploration & is the largest stakeholder. A total of 1,304,310 shares are owned by the mutual fund manager. The iShares Core S&P Small Cap ETF, which owns about 7.43% of LPI stock, is the second-largest Mutual Fund holder. It holds 1,270,439 shares valued at 82.13 million. Vanguard Total Stock Market Index holds 2.84% of the stake in LPI, owning 484,900 shares worth 31.35 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for LPI since 8 analysts follow the stock currently. There are 2 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With LPI analysts setting a high price target of $127.00 and a low target of $70.00, the average target price over the next 12 months is $88.63. Based on these targets, LPI could surge 101.78% to reach the target high and rise by 11.22% to reach the target low. Reaching the average price target will result in a growth of 40.82% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. LPI will report FY 2022 earnings on 02/15/2023. Analysts have provided yearly estimates in a range of $30.20 being high and $21.31 being low. For LPI, this leads to a yearly average estimate of $23.67. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Laredo Petroleum Inc. surprised analysts by -$0.91 when it reported $5.30 EPS against a consensus estimate of $6.21. The surprise factor in the prior quarter was $0.20. Based on analyst estimates, the high estimate for the next quarter is $6.65 and the low estimate is $3.30. The average estimate for the next quarter is thus $4.57.

Summary of Insider Activity:

Insiders traded LPI stock several times over the past three months with 0 Buys and 5 Sells. In these transactions, 0 shares were bought while 11,693 shares were sold. The number of buy transactions has increased to 20 while that of sell transactions has risen to 39 over the past year. The total number of shares bought during that period was 133,646 while 642,810 shares were sold.

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