UBS Cuts Price target on Denbury Resources (DNR) Following Revised Outlook
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UBS maintained a Sell rating on Denbury Resources (NYSE: DNR), and cut the price target to $2.00 (from $3.00), following the company's revised 2015 outlook.
Analyst William Janela commented, "DNR recently provided a revised 2015 outlook, indicating full-year production is now expected fall in the lower half of its 72.5-75.5 MBoed guidance range due to weatherrelated downtime (~250 Boed impact to full-year volumes) and shut-in of uneconomic wells (~500 Boed). It also lowered its 2015 capex budget by ~5% (from $550MM to $520MM), reflecting a $50MM reduction in tertiary development spending ($270MM vs. $320MM prior) partly offset by an additional $20MM in capitalized costs ($105MM vs. $85MM original budget). Combined with suspension of its dividend (announced 9/21), the incremental spending cuts should free up ~$50MM of cash in 2H15."
Shares of Denbury Resources closed at $2.50 yesterday.
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