UBS were the first to react to SandRidge Energy (SD) earnings, reiterating their buy rating:
"UBS analysts are reiterating their "buy" rating for SandRidge Energy (NYSE:SD) and reducing their price target to $12, from $14, after a disappointing end to a difficult year for the company.
Analysts William A. Featherston said, "SD trimmed its 2010 production guidance to the low-end of previous guidance of 130-135 Bcfe, while still keeping its capex budget unchanged at $860 million. We now forecast 2010 production to grow 24% and 15% in 2012. We've cut our 2010-11 EPS/CFPS to $0.75/$1.80 and $0.80/$2.20 from $1.05/$1.85 and $1.15/$2.25, respectively. Lower production guidance was driven by a reduced per well type curve for the Warwick thrust, where SD now assumes a 6.6 Bcfe/well (1.96 Bcf of methane) down from an 8.4 Bcfe/well (2.5 Bcfe of methane).""
The stock performed poorly on Friday but managed to rally into the close, finishing the day at 7.94. Remember that on Wednesday the stock had closed at 8.04. So, probably most of this bad quarterly report was already priced in. Anyway the stock won`t rally significantly from these levels right away because they have to "prove" themselves to the Street again. And that takes time.
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