Stone Energy (SGY) Fine-Tunes Project Scheduling; Imperial Capital Reiterates Outperform

Imperial Capital maintained an Outperform rating on Stone Energy (NYSE: SGY), and cut the price target to $8.00 (from $10.00), following the company's 3Q15 earnings report. SGY’s 3Q15 adjusted EPS of ($0.15) missed consensus of ($0.09). Total production of 40.0mboe/d beat the consensus of 38.4mboe/d. SGY is focused only on projects that have acceptable returns in the current environment, and can grow in 2016 without tapping the borrowing base.

Analyst Kim Pacanovsky commented, "We are maintaining our Outperform rating on SGY shares and lowering our one-year price target to $8 from $10, about 26% above the recent share price. Because SGY is focused on restraining capital while also allowing for future growth, it has fine-tuned the scheduling of projects in its 2016 drilling program as detailed in the company’s 3Q15 earnings call on 11/3/15 that will allow it to drill relatively near to cash flow while potentially adding meaningful reserves in 2016 and production growth in the future. We are lowering our estimates to reflect further scaled back activity in 2016 and also lower natural gas prices, as shown in Figure 1. We are increasing our 2016 EPS estimate to ($0.62) from ($1.95)."

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

Shares of Stone Energy closed at $6.36 yesterday.

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