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NOG Is ~450% Higher than Its 52-Week Low: Can It Keep Rising?

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NOG is up ~450% from its 52-week low

Northern Oil & Gas (NOG), a Williston Basin–focused exploration and production company, has rallied ~450% from its 52-week low. NOG’s strength could be attributed to its better-than-expected earnings, which were boosted by its strong production growth and higher average realized prices. The company has increased its fiscal 2018 production guidance to 23,670–24,300 barrels of oil equivalent per day, 62% higher than its fiscal 2017 production.

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Where can the stock go from here?

Northern Oil & Gas has a high exposure to crude oil—it formed ~85% of the company’s average daily production in the second quarter. Weak crude oil prices could weigh on NOG’s stock performance.

Analysts expect the company’s CFFO (cash flow from operations) to grow 235% in fiscal 2018, 76% in fiscal 2019, and 2% in fiscal 2020. NOG’s price-to-CFFO ratio was 3.3x on October 12, below the industry median of 5.1x.

Analysts’ recommendations

Of the analysts covering NOG, ~86% recommend “buy,” and ~14% recommend “hold.” Their average target price of $5.30 implies a ~43% upside to NOG’s current price of $4.

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