Laredo Petroleum (LPI), mcap=$1.15bn, price $66.46 vs $67.50

– The investment provides high beta exposure to high for longer oil prices.
– Heavily levered E&P that is relatively unhedged for 2023.
– At $90 WTI guidance of $900m of FCF over the next 2 years (40% yield).
– Expected to deleverage the balance sheet, begin returning cash to shareholders, and maintain current production levels.
– After these steps likely to re-rate from 2x to 3.5x ’23 EBITDA in line with peer $MGY.

– Trades at 2x 2023 EBITDA.
– Comp $MGY trades at 3.5x.
– At a similar multiple worth $180/share.

Exp. gain: +170% to $180/share

Full $LPI write-up (free guest account required):

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