Imperial Capital Raises Price Target on Comstock Resources (CRK) Following Reverse Stock Split

August 11, 2016 7:30 AM EDT
Get Alerts CRK Hot Sheet
Price: $9.70 -3%

Rating Summary:
    4 Buy, 11 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 17 | Down: 27 | New: 7
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Imperial Capital reiterated an In-Line rating on Comstock Resources (NYSE: CRK), and raised the price target to $3.75 (from $0.75), following the company's 1-for-5 reverse stock split.

Analyst Kim Pacanovsky commented, "We are maintaining our In-Line rating on CRK shares and are adjusting our one-year price target to $3.75 from $0.75 (reflecting the 1-for-5 reverse stock split), about 5% below the recent share price. CRK continues to produce excellent operational results in the Haynesville/Bossier shale with stellar IRRs, but we believe that the use of hedges to secure these strong returns would ensure a baseline level of cash flow and provide greater comfort to investors. We believe the 1-for-5 reverse stock split and 2nd lien secured debt for equity tender offer, announced by the company on 8/1/16, are needed steps in providing CRK with the opportunity to recover from its historical reticence from issuing equity (which led to it using a debt-only model for growth) and reticence to hedging. With liquidity of $117mn and the return of a one-rig program in October 2016, we still await a significant liquidity raising event before becoming more positive on the shares."

For an analyst ratings summary and ratings history on Comstock Resources click here. For more ratings news on Comstock Resources click here.

Shares of Comstock Resources closed at $3.94 yesterday.

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