KeyBanc Downgrades Cimarex Energy (XEC) to Hold

KeyBanc downgraded Cimarex Energy (NYSE: XEC) from Buy to Hold and removed its price target

Analyst David Deckelbaum said, "We are downgrading shares of Cimarex Energy Co. from BUY to HOLD in anticipation of the Company's 2015 spending plans, which we believe will result in relatively full valuations. Shares of XEC have held up well throughout the massive commodity sell-off since the end of October, falling just -11% vs. the EPX of -22% and our coverage universe average of -38%. We attribute the relative out-performance to a currently immaculate balance sheet at 0.7x net debt/EBITDAX at YE14, cash on hand from recent non core asset sales and no bank debt. However, XEC is unhedged in 2015 and is a rate of return focused organization."

"While prudent, we expect Cimarex to cut capital expenditures to be more in line with cash flows and find only its highest rate of return projects. Given the dramatic selloff in the commodity, at strip pricing, we believe that XEC will have to cut spending well below 50% in 2015 and that debt metrics should expand beyond 2.5x by the end of 2015 at NYMEX pricing, even if capex is cut to absolute bare bones levels," he added.

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

Shares of Cimarex Energy closed at $100.79 yesterday.

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