Global Hunter Securities Downgrades PetroQuest (PQ) to Accumulate; Two Different Sides
PQ Hot Sheet
Rating Summary:4 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 22 | Down: 8 | New: 36
Global Hunter Securities downgraded PetroQuest (NYSE: PQ) from Buy to Accumulate with a price target cut from $14 to $7.60.
Analyst, Mike Kelly, said, "PQ put out two separate press releases last week that showed two different sides to the company. The first update was PQ’s 2011 reserve report, which portrayed the company as a high growth E&P in the late innings of a successful transition from a bona fide Gulf Coast company to a well-balanced operator boasting both long-life reserves and high impact cash flow assets. The highlight of the report was an aggressive ramp in 2011 proved reserves, which increased 37% y/y and handily beat guidance of +25% growth. However, the following morning PQ put out an ops update revealing that management was Tea Partying their 2012 capex budget, cutting it 45% y/y in order to stay within shouting distance of cash flow. As a result, production growth expectations had to be dialed back and investors seemed somewhat confused by how to frame the stock - is PQ a strong growth transition story, or conservative value name? We think you have to wait for the Mississippian results to find out, and we’re lowering our rating."
For an analyst ratings summary and ratings history on PetroQuest click here. For more ratings news on PetroQuest click here.
Shares of PetroQuest closed at $6.05 yesterday, with a 52 week range of $4.72-$9.75.
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Analyst, Mike Kelly, said, "PQ put out two separate press releases last week that showed two different sides to the company. The first update was PQ’s 2011 reserve report, which portrayed the company as a high growth E&P in the late innings of a successful transition from a bona fide Gulf Coast company to a well-balanced operator boasting both long-life reserves and high impact cash flow assets. The highlight of the report was an aggressive ramp in 2011 proved reserves, which increased 37% y/y and handily beat guidance of +25% growth. However, the following morning PQ put out an ops update revealing that management was Tea Partying their 2012 capex budget, cutting it 45% y/y in order to stay within shouting distance of cash flow. As a result, production growth expectations had to be dialed back and investors seemed somewhat confused by how to frame the stock - is PQ a strong growth transition story, or conservative value name? We think you have to wait for the Mississippian results to find out, and we’re lowering our rating."
For an analyst ratings summary and ratings history on PetroQuest click here. For more ratings news on PetroQuest click here.
Shares of PetroQuest closed at $6.05 yesterday, with a 52 week range of $4.72-$9.75.
Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!
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