Mizuho Securities Starts Denbury Resources (DNR) at Neutral
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Mizuho Securities initiates coverage on Denbury Resources (NYSE: DNR) with a Neutral rating and a price target of $3.00.
Analyst Timothy Rezvan commented, "Denbury is a high-beta oil sentiment proxy (96% oil skew, 4.8x leverage as of June 30). These metrics overshadow steps undertaken to improve the cost structure and recapitalize the balance sheet. Management's efforts pushed off bankruptcy fears and showed Denbury can live in a ~$40's/b oil world, but our work suggests organic deleveraging depends on $55+/b oil, which we do not forecast in '17. This adds to uncertainty on future tertiary oil development. Denbury's leverage makes it compelling for oil bulls, but we initiate with a Neutral rating, given our $50/b '17 oil price deck."
Shares of Denbury Resources closed at $3.17 yesterday.
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