KLR Group Downgrades Sanchez Energy (SN) to Accumulate

August 19, 2016 7:26 AM EDT
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Price: $7.30 +1.67%

Rating Summary:
    12 Buy, 7 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 48 | New: 20
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KLR Group downgraded Sanchez Energy (NYSE: SN) from Buy to Accumulate with a price target of $10. Analyst John Gerdes tied the downgrade to valuation.

"Sanchez’s share price has appreciated almost 50% since our mid-July upgrade, outperforming the sector by ~40%, and now reflects modest intrinsic upside thus requiring a downgrade to Accumulate. Sanchez’s mid-cycle (’18) capital yield is ~105% versus the industry median cash recycle ratio of ~130%. Our ’16 production expectation of ~55 Mboepd is ~6% above company guidance (48-52 Mboepd). Assuming a commodity price recovery, our economic model assumes Sanchez conducts a three-rig program in ’17 and four-rig program in ’18," said Gerdes.

For an analyst ratings summary and ratings history on Sanchez Energy click here. For more ratings news on Sanchez Energy click here.

Shares of Sanchez Energy closed at $9.17 yesterday.

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