Jefferies Reiterates Buy on Encana (ECA) Following Announced Equity Offering
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Jefferies reiterated a Buy rating and $13.00 price target on EnCana Corp. (NYSE: ECA) following the company's announced equity offering. The deal was a surprise, despite the recent finalization of the company's ‘Shelf Prospectus’ in late-August. The offering should raise ~$1.0 B and add 12.5% to its share count, which is designed to retire bank borrowings and to preserve re-investment in ECA’s truly core Midland acreage.
Analyst Jonathan Wolff commented, "We expect share price weakness on the surprise equity offering announcement. The very large financing is designed to protect re-investment amid low crude/ AECO curves. We see a funded, multi-year growth outlook as a likely outcome at ECA’s coming analyst day (Oct.5). But investors are now likely to push ECA to further monetize its (Canadian) Montney land holdings or consider a strategic re-alignment."
Shares of EnCana Corp. closed at $9.86 yesterday.
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Related EntitiesJefferies & Co, Crude Oil, Equity Offerings
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