By Greg Peel<\/p>\n
Our feature story How Do You Value An Oil Company? (21\/07\/06)\u00a0takes the reader through the extraordinary complexities and range of potential valuation outcomes for an oil production and exploration company, using Hardman Resources (HDR) as the case study.<\/p>\n
It was noted that at the time of writing the FN Arena database showed a spread of target prices from $2.00 to $2.43, for an average of $2.21 at a spread of 21%.<\/p>\n
JP Morgan’s analysts were not previously fans of target prices, but they have come to adopt them over the course of this year. To that end, while FN Arena previously did not have a target registered for JP Morgan, as of this morning’s update from the analysts, we do.<\/p>\n
JP Morgan has probably been the most vocal of the brokers in its frustration with Chinguetti production downgrades. It is also the only broker to rate the stock Neutral, rather than Buy. Today’s report included a target price of $1.60 for Hardman.<\/p>\n
This means the target spread is now $1.60 to $2.43, or 52%, with an average of $2.09.<\/p>\n
This only serves to reinforce the argument put forward in the feature article, being that oil company valuation, particularly at the small cap end, is a bit of a wildcard business.<\/p>\n","protected":false},"excerpt":{"rendered":"
A new price target has served to reinforce the difficulties in valuing oil companies, as discussed in our earlier feature.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/52063"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=52063"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/52063\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=52063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=52063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=52063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}