FBR Capital Downgrades Gastar Exploration Limited (GST) to Market Perform
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FBR Capital downgraded Gastar Exploration Limited (NYSE: GST) from Outperform to Market Perform with a price target of $1.50 (from $1.25).
Analyst Chad Mabry commented, "We are downgrading shares of Gastar Exploration (GST) to Market Perform on valuation. Since we last affirmed our Outperform rating on October 3, 2016, the stock has increased by 64% (versus -1% for the XOP). The latest surge was driven by some major moves in the STACK play, highlighted by a joint development agreement (JDA) and a non-core acreage sale. We are net positive on these developments, which should help delineate the company’s upside potential in the play and enhance its liquidity. Our price target increases to $1.50 (from $1.25) as a result and implies approximately $8,500/acre for its STACK upside (versus recent M&A deals of $10,000 to $12,000). At current levels, we view GST’s risk/reward to be valued fairly."
Shares of Gastar Exploration Limited closed at $1.39 yesterday.
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