Chesapeake (CHK) Filings Do Not Signal 'Pressing Need for Cash' -Deutsche Bank

Deutsche Bank just issued a research report evaluating the impact of Chesapeake Energy's (NYSE: CHK) recent SEC filings on its stock. The firm lowered its price target on Chesapeake from $32 to $29 but maintains a Buy rating.

The firm notes that the three SEC filings were all related to equity offerings, and calculates that "full issuance at today's prices would imply a 17% expansion to the Q3 share count." Deutsche says that given management commentary and the recent closing of its Statoil Marcellus joint venture for $1.25 billion in cash, the firm does "not believe these filings were driven by a pressing need for cash."

Deutsche said that its lowered price target on Chesapeake is based on "the likelihood of some equity dilution by early 2009", but feels that "today's move over-discounts" potential concerns related to the stock.

With shares of Chesapeake trading down more than 15% to $17.06 on today's news, Deutsche Bank's new $29 price target represents potential upside of about 70% from current levels.

Chesapeake Energy Corporation, an oil and natural gas exploration and production company, engages in the acquisition, exploration, and development of properties for the production of crude oil and natural gas from underground reservoirs.

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