BofA Securities Downgrades Chord Energy Corp (CHRD) to Neutral

BofA Securities analyst Noah Hungness downgraded Chord Energy Corp (NASDAQ: CHRD) from Buy to Neutral with a price target of $138.00 (from $208.00).

The analyst comments "CHRD has been one of the worst performing stocks in our coverage and in our view has been a victim of a weaker macro-outlook for global oil balances. The company has continued to hit numbers at earnings even seeing some modest upward revisions in oil production. However, with a post dividend 2025 free cash flow breakeven at $53/bbl the company has a higher leverage to oil prices than peers which is a headwind when balances are expected to go from a slight supply deficit of 100 kbd to a supply surplus of 800 kbd. However, even after declining by 37% from its peak in April we see CHRD with an 8% 2025 debt adjusted free cash flow yield at our price deck compares to a peer average at 8%. It’s not obviously cheap versus lower breakeven peers and while the company’s 3 year outlook provides near term confidence in the company’s free cash flow capacity in our view outperformance will require a higher oil price. We still view 4 mile laterals as a potentially positive catalyst for the stock but with initial well results not expected until the middle of 2025 we see near term upside as limited. We lower our PO to $138 and lower our rating to Neutral from Buy. Looking into 2025 we expect the wells to trend more towards 2 milers with only 40% of the program being 3 mile laterals. Then in 26 and 27 we expect the percent of TILs that are 3 mile laterals to increase to average 50% over the 3 year outlook."

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

Shares of Chord Energy Corp closed at $123.78 yesterday.

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