Callon Petroleum price target lowered to $50 from $55 at RBC Capital

RBC Capital analyst Scott Hanold lowered the firm’s price target on Callon Petroleum to $50 from $55 but keeps an Outperform rating on the shares. The analyst is updating the firm’s model based on the company’s Q1 earnings, Permian acquisition, and Eagleford divestiture. The A&D transactions strengthen the company’s strategy to reduce debt, initiate shareholder returns, and focus its Permian assets, though the impact has reduced RBC’s 2024 projected earnings by 10%-12% and FCF by 5%-6% because the assets sold had more EBITDA and shares were issued to the seller of the acquired properties, the firm tells investors in a research note.