Shares of Anadarko Petroleum, the second-largest U.S. independent oil and natural gas producer, are trading around all-time highs and have recovered substantially after a major plunge following the Gulf of Mexico oil spill last year, but some analysts think the stock still has room to run.
''Based on a capital program of $6.2 billion in 2011 and $7 billion in 2012 and the current commodity price assumptions referenced above, we project that Anadarko should have free cash flow of $860 million this year and over $1.7 billion in 2012,'' research firm Sterne Agee said in a note. The firm raised its 2011 EBITDA estimate on Anadarko to $8.1 billion from $7.9 billion and its 2012 EBITDA estimate to $9.5 billion from $9 billion.
Citigroup raised its price target on Anadarko (APC) today to $100 from $95, implying substantial upside from where the shares currently trade. Citigroup reiterated a ''buy'' rating on the stock and forecast 2011 EPS of $3.63 and 2012 EPS of $5.15.