- While most of the stock market tanks, energy stocks are enjoying a banner day on the back of spiking crude oil prices following OPEC's surprise decision to keep production steady to the end of April.
- Among the biggest gainers is Continental Resources (CLR +10.2%), which is surging to 52-week highs despite getting slapped with a downgrade to Neutral from Buy with a $26 price target at MKM Partners, citing the stock's double since November.
- Continental's capital intensity is "slightly above the industry median though the company generates an industry competitive cash operating margin," MKM's John Gerdes writes. "Accordingly, Continental's full-cycle return of 120%-125% is slightly below the industry median cash recycle ratio of ~130%."
- The company should generate ~$600M of free cash flow this year, assuming a $1.4B capital spending plan.
- Continental should be able to reduce its net debt to less than $4B by 2023 while maintaining or slightly increasing production at high-$40s oil, Elephant Analytics writes in a bullish analysis posted on Seeking Alpha.