KLR Group Downgrades Bonanza Creek Energy (BCEI) to Hold

KLR Group downgraded Bonanza Creek Energy (NYSE: BCEI) from Buy to Hold with a price target of $2.50 (from $6.50) as the termination of the midstream sale creates capitalization uncertainty.

Analyst John Gerdes commented, "We are downgrading BCEI from Buy to Hold due to concern as to the company's capital structure. Further, we are lowering our target price $6.50 to $2.50 per share due to approximately 15% lower ’16 production than our prior expectation, the termination of the midstream sale and consequent ~20% reduction in long-term capital spending. Bonanza Creek’s mid-cycle (’18) capital yield is 90%-95% versus the industry median cash recycle ratio of ~125%. Our 1Q/16 production expectation of ~24.4 Mboepd is ~2% above company guidance (23.7-24 Mboepd)."

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

Shares of Bonanza Creek Energy closed at $1.05 yesterday.

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