Continental Resources explores, develops, and produces crude oil and natural gas properties in the north, south, and east regions of the United States. The company was founded in 1967 and is based in Oklahoma City, Oklahoma.
CLR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Continental Resources Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Continental Resources Inc ranked in the 0th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Continental Resources Inc ended up being:
The compound growth rate in the free cash flow of Continental Resources Inc over the past 4.01 years is -0.39%; that's better than only 5.56% of cash flow producing equities in the Energy sector, where it is classified.
Continental Resources Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -0.61. This coverage rate is greater than that of only 22.57% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Energy that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CLR, try CPE, DVN, GLOG, KLXE, and NINE.
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Continental Resources posted a net loss of $239.3 million for the second quarter of 2020, it announced after markets closed Monday. That loss, based upon total revenues of $175.7 million, shook out to about 66 cents per share. The second quarter of 2019, the company posted a net income of $236.5 million, or 63 cents per share, on total revenues of about $1.2 billion. The difference between two periods provides a stark illustration of how the COVID-19-induced collapse in global energy demand impacted commodity prices and the company’s response to the situation.