UPDATE: Global Hunter Securities Downgrades SandRidge Energy (SD) to Neutral
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Price: $5.23 +0.97%
Rating Summary:
1 Buy, 15 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
1 Buy, 15 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade SD Now!
(Updated - November 12, 2012 9:00 AM EST)
Global Hunter Securities downgraded SandRidge Energy (NYSE: SD) from Buy to Neutral with a price target of $5.00 (from $9.00).
In the rating change the firm comments, "Caveat emptor may be the best strategy with respect to SD shares after Q3'12's operations update and earnings announcement. Not only did management announce plans to sell the Central Basin Platform assets, but it also informed the market that oil production from the company's other crown jewel asset, the Mississippian Lime, was not what they thought it would be. Specifically, what once was thought to be at least a 45% oil resource from the Mississippian Lime now looks more like 40% oil. While Mississippian downspacing typically would be a positive development, in this instance it appears to be more like marginalizing an even larger asset. Flowing lower oil volume and zeroing Permian capex to reflect sale plans through our valuation model substantially reduced our valuation estimate to $5 per share from $9. In response to this reduction in estimated equity value we are reducing our Buy rating to Neutral. We base our $5 target on a long-run production-driven DCF valuation methodology."
For an analyst ratings summary and ratings history on SandRidge Energy click here. For more ratings news on SandRidge Energy click here.
Shares of SandRidge Energy closed at $5.51 yesterday, with a 52 week range of $4.81-$9.04.
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Global Hunter Securities downgraded SandRidge Energy (NYSE: SD) from Buy to Neutral with a price target of $5.00 (from $9.00).
In the rating change the firm comments, "Caveat emptor may be the best strategy with respect to SD shares after Q3'12's operations update and earnings announcement. Not only did management announce plans to sell the Central Basin Platform assets, but it also informed the market that oil production from the company's other crown jewel asset, the Mississippian Lime, was not what they thought it would be. Specifically, what once was thought to be at least a 45% oil resource from the Mississippian Lime now looks more like 40% oil. While Mississippian downspacing typically would be a positive development, in this instance it appears to be more like marginalizing an even larger asset. Flowing lower oil volume and zeroing Permian capex to reflect sale plans through our valuation model substantially reduced our valuation estimate to $5 per share from $9. In response to this reduction in estimated equity value we are reducing our Buy rating to Neutral. We base our $5 target on a long-run production-driven DCF valuation methodology."
For an analyst ratings summary and ratings history on SandRidge Energy click here. For more ratings news on SandRidge Energy click here.
Shares of SandRidge Energy closed at $5.51 yesterday, with a 52 week range of $4.81-$9.04.
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