Global Hunter Securities Downgrades Chesapeake Energy (CHK) to Accumulate; In-line Results

May 4, 2011 8:00 AM EDT
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Price: $7.01 +1.30%

Rating Summary:
    9 Buy, 27 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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Global Hunter Securities downgraded Chesapeake Energy (NYSE: CHK) from Buy to Accumulate. PT $39.

Global analyst says, "Chesapeake Energy reported 1Q11 results that were in line with our estimates but cost creep has us reducing our 2011 financial estimates. We remain positive on Chesapeake as the company has already met its 25% debt-recovery goal and is poised to mitigate further service cost inflation through its vertical integration. We are downgrading our rating but maintaining our price target of $39 per share based on 7.5x 2011 EBITDA, 6.5x 2012 EBITDA, and our 2011 estimated proved NAV of $55.04 and a 30% IRR to our 2015 estimated proved NAV of $97.91. While CHK has this year announced a DJ/Powder JV, sale of the Fayetteville, and its 9th VPP, the next big catalysts could be 2H11 with a JV on the Mississippian play or the Utica or a partial monetization of its oilfield service assets in 2012."

For more ratings news on Chesapeake Energy click here and for the rating history of Chesapeake Energy click here.

Shares of Chesapeake Energy closed at $31.33 yesterday.

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