UBS Lifts PT/Est. on Chesapeake Energy (CHK), Remains on the Sidelines

February 22, 2013 11:42 AM EST
Get Alerts CHK Hot Sheet
Price: $6.94 -1%

Rating Summary:
    9 Buy, 27 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 22 | New: 54
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UBS bumped its price target and estimates on Chesapeake Energy (NYSE: CHK) higher following its Q4 beat but maintained a Neutral rating. The firm attribute the beat to: 1) unusually low G&A ($0.04/sh), 2) higher than expected price realizations ($0.02/sh), & 3) lower net income attributable to non-controlling interest ($0.03/sh).

The price target goes from $18 to $20. FY13 EPS goes from $2.86 to $3.03, but is still sharply below the consensus of $4.19. FY14 EPS goes from $3.85 to $4.10, but is well below the consensus of $5.49.

Key takeaways from the results, according to analyst William Featherston, were: 1) no change in strategic plan but board showing impact given lower cost guidance; 2) capex declined to $500 MM/month, on track to meet ’13 budget; 3) CHK hedged 50% of ’13 gas volumes at $3.62/Mcf; 4) CHK trimmed its ’13 divestiture target to $4-7bn from $5-$7bn; 5) 1P reserves fell 3% QoQ and 16% YoY to 15.69 Tcfe; 6) reduced debt by $3.6bn in 4Q and have >$4bn in liquidity.

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

Shares of Chesapeake Energy closed at $20.19 yesterday.

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