Wells Fargo Starts Chesapeake Granite Wash Trust (CHKR) at Market Perform

Wells Fargo initiates coverage on Chesapeake Granite Wash Trust (NYSE: CHKR) with a Market Perform. PT range $19-$23.

Wells analyst says, "CHKR represents the first royalty trust sponsored by Chesapeake Energy Inc., (NYSE: CHK) a sponsor that we believe brings name recognition, operating credibility, and a track record of success. CHKR offers exposure to a solid underlying asset base, near-term commodity price protection, and increasing distributions over the drilling period that translate to an attractive initial yield. However, based on
our discounted cash flow model, which values units at $19.97, we believe that at current trading levels, units are fairly priced. Our valuation range of $19.00- 23.00 per unit is based on our discounted cash flow model, which implies a per unit value of $19.97. Our EPU estimate for 2011 is $1.30 and our 2012 EPU estimate is $3.12."

For an analyst ratings summary and ratings history on Chesapeake Granite Wash Trust click here. For more ratings news on Chesapeake Granite Wash Trust click here.

Shares of Chesapeake Granite Wash Trust closed at $21.23 yesterday.

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