Sterne Agee CRT Cuts Price Target as Energen (EGN) Releases Conservative 2016/2017 Estimates

Sterne Agee CRT maintained a Buy rating on Energen (NYSE: EGN), and cut the price target to $36.00 (from $46.00), following the company's 4Q earnings report. 2016/2017 EBITDA estimates decline to $257/$382 million from $331/$452 million. EPS estimates decline to ($2.10)/($1.22) from ($2.06)/($1.21). Sterne Agee believes management baked in a lot of conservatism with guidance following messy 4Q results.

Analyst Tim Rezvan commented, "We reiterate our Buy rating on EGN shares, but lower our PT to $36 from $46, reflecting lower '16/'17 earnings, and a lower target multiple, given another quarter of uneven execution. EGN shares' sharp underperformance YTD (-44%, vs group down 21%) results in an undervalued soon-to-be pure-play Permian operator. If management is unable to drive multiple expansion through execution in '16, we believe several suitors would be interested in the company's derisked inventory in the one oil shale play that has seen rich acreage deals persist through the downturn, and that has well capitalized operators looking to expand their footprint."

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

Shares of Energen closed at $22.91 yesterday.

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