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UPDATE: Global Hunter Securities Upgrades Abraxas Petroleum (AXAS) to Accumulate

March 13, 2014 7:08 AM EDT Send to a Friend
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Price: $5.73 --0%

Rating Summary:
    7 Buy, 2 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 6 | Down: 14 | New: 17
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(Updated - March 13, 2014 10:36 AM EDT)

Global Hunter Securities upgraded Abraxas Petroleum (NASDAQ: AXAS) from Neutral to Accumulate with a price target of $4.50.

Analyst Mike Kelly said, "Very positive developments on AXAS's conference call coupled with a compelling valuation and organic growth profile lead us to upgrade AXAS to Accumulate from Neutral and increase our price target to $4.50 from $4."

"Net debt fell ~41% sequentially post the $73MM sale of its non-operated Eagle Ford assets, which has dropped AXAS's FY14E EV/EBITDA multiple to 5.1x vs. small-cap peers at 6x, and has helped push our debt-adjusted production growth per share forecast to 10% in 2014, now higher than the industry average of ~7%. AXAS's inventory footprint is also much improved vs. prior quarters; we now see a future well count >2x higher than what we had dialed in two quarters prior, driven by Eagle Ford success at its emerging Jourdanton prospect (>100 locations possible) and downspacing in the Bakken. Lastly, AXAS's margin profile has shown a notable improvement – we forecast its 2014 recycle ratio (op margin per boe/DD&A per boe) at 2.23 vs. 1.47 in 2013; AXAS is now outperforming its peers on this metric (industry avg. = 2.0)."

For an analyst ratings summary and ratings history on Abraxas Petroleum click here. For more ratings news on Abraxas Petroleum click here.

Shares of Abraxas Petroleum closed at $3.14 yesterday.

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