Laredo Petroleum, Inc. (LPI) Stock Too Hot to Handle

Analysts at MKM Partners, assumed coverage of Laredo Petroleum, Inc. (NYSE:LPI) with Buy recommendation, according to their opinion released on December 06. Tudor Pickering analysts have downgraded their rating of LPI stock from Buy to Hold in a separate flash note to investors on May 10.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Laredo Petroleum, Inc. (NYSE:LPI)’s prospects. The earliest insider trade took place on 09/27/2018. Warburg Pincus Private Equity parted with a total of 12.3 million shares of company at average share price of $8.08. The total for the sales was set at $99.38 million. After this transaction, the 10% Owner account balance stood at 91.33 million shares. The stock lost -45.17 percent since that insider sale. On 09/27/2018, Kagan Peter, Director, sold 12.3 million shares at a price per share of $8.08. This removed 99.38 million shares from the insider’s fortune and the stock saw a -45.17 percent retreat in value since the news became public. This transaction left 51.29 million shares in the Director account. On 09/27/2018, Director Levy James R. performed a sale transaction worth $99.38 million. This sale at $8.08 each has eliminated 12.3 million shares from the insider’s portfolio position. Meanwhile, shares have recorded -45.17 percent decrease since the transaction was reported. The insider now is left with 51.31 million shares remaining in the account. Warburg Pincus Private Equity, who performs the 10% Owner job, sold 14.2 million shares for $105.36 million. The disposal occurred on 09/11/2018 was priced at $7.42 per share. The share price plunged -40.3 percent since the reporting date. Warburg Pincus Private Equity now left with a stake of 104 million LPI stock worth $460.72 million after the insider selling.

Laredo Petroleum, Inc. (LPI) is expected to jump by 125.73 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $13-month high price target. This represents a whopping 193.45 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $8.5, which represents a return potential of 91.87 percent when compared to the closing price of the stock of $4.43 on Thursday, December 06. The lowest price target for the stock is $5.5 — slightly more than 24.15 percent from LPI’s current share price.

The shares are currently floating around the first support level of $4.24. Below this, the next support is placed in the zone of $4.05. Till the time, the LPI stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 36.22 on daily chart, which may remain a cause for comfort. If the price breaks below $4.05 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $4.62 mark may result into a pull-back move towards $4.81 level.

LPI shares dropped -0.32 points or -6.74 percent on Thursday to $4.43 with a light trade volume of 4.877 million shares. After opening the session at $4.61, the shares went as high as $4.62 and as low as $4.24, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $1.07 billion and now has 241.9 million shares outstanding. Laredo Petroleum, Inc. (LPI) stock has lost -18.86 percent of market value in 21 trading days.

LPI stock has a trailing 3-year beta of 1.67, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $2.45 a share in the trailing twelve months. The stock’s value has fallen -58.25 percent year to date (YTD) against a decline of -56.99 percent in 12 month’s time. The company’s shares still trade -62.07 percent away from its 1-year high of $11.68 and 1.84 percent up from 52-week low of $4.35. The average consensus rating on the company is 2.6, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Laredo Petroleum, Inc. (LPI) are trading at a P/E ratio of 1.95 times earnings reported for the past 12 months. The industry LPI operates in has an average P/E of 16.71. Its P/E ratio went as low as 4.64X and as high as 31.92 over the 5-year span. Further, it is sporting a 0.95 on the Price-to-Sales ratio. Compare this with the industry average P/S of 99.8. 60 percent is the gross profit margin for Laredo Petroleum, Inc. and operating margin sits at 31.3 percent. Along with this, the net profit margin is 51.6 percent.

LPI will be showing off its Q4 earnings on February 13. Analysts are forecasting revenue to climb 0.1 percent to $241M in the next fiscal quarter, while earnings are seen soaring by nearly 47.37 percent to $0.28 per share. History has shown that shares in Laredo Petroleum, Inc. have gone down on 16 different earnings reaction days and are predicted to add 0.06 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.27 per share, worse than the $0.29, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $280M, better than the $224M analysts expected. Earnings are estimated to increase by 297.7 percent this year, 17.47 percent next year and continue to increase by 37.48 percent annually for the next 5 years.