Mizuho Securities Upgrades Chesapeake Energy (CHK) to Buy

Mizuho Securities analyst Nitin Kumar upgraded Chesapeake Energy (NASDAQ: CHK) from Neutral to Buy with a price target of $104.00 (from $96.00).

The analyst comments "Bottom line - Positive. In our opinion, the much-anticipated merger between CHK and SWN not only creates a US shale gas powerhouse (~7.9 bcfe/d production) with operational and marketing flexibility, demonstrable cost synergies of at least $400mm annually by YE25 are accretive to both NAV and 2025+ multiples. Critically, we estimate the pro forma entity has a FCF breakeven of ~$2.50/mmbtu in 2025/26 despite maintaining the higher GP&T cost structure at SWN in our model. While near-term natural gas price weakness, below peer FCF in 2024 and higher pro forma leverage (~1.1x Net Debt/EBITDA YE024) are risks, we see ~30% to our updated NAV of $104/sh (vs $96/sh prior). Thus, we upgrade CHK to Buy."

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

Shares of Chesapeake Energy closed at $79.62 yesterday.

You May Also Be Interested In

• Fiserv (FISV) PT Lowered to $60 at Freedom Broker
• Freedom Broker Upgrades Lifeway Foods (LWAY) to Buy
• New Street Research Upgrades Micron Technology (MU) to Buy