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I last wrote about Continental Resources (NYSE:CLR) in November when it was trading at $70 a share. The largest energy producer in the Bakken has been on a roll since that time rising some 30%. However, the good news on the Bakken juggernaut keeps coming and the shares still have upside.

Recent positives:

  • JP Morgan just upgraded the shares to "Outperform" from "Neutral". The firm has a $122 a share price target on the stock.
  • Consensus earnings estimates for both FY2013 and FY2014 have risen over 5% over the last two months.
  • Deutsche Bank initiated the shares as a "Buy" in January.
  • Its recent earnings report showed it made a profit of $1.04 a share, well above consensus estimates of 87 cents a share.

4 reasons CLR still has upside from $91 a share:

  1. Earnings per share are increasing rapidly. The company made under a $1 a share in FY2010, over $2 in FY2011, and just under $3.50 a share in FY2012. Analysts project CLR will make $5 a share in FY2013 and over $6.50 in FY2014.
  2. The company has grown revenues at better than a 20% CAGR over the last five years. That rate of increase in accelerating. Analysts expect better than 40% revenue growth in FY2013 and above 30% in FY2014. The stock sells for a minuscule five year projected PEG (.48).
  3. Given this growth, the stock is still cheap at just 13.5x 2014's projected earnings.
  4. The quality of earnings is solid, evidenced by an increase of operating cash flow of 150% over the last three years.
Source: Continental Resources: Biggest Bakken Producer Continues To Roll