UPDATE: UBS Downgrades Centennial Resource Development (CDEV) to Neutral

UBS analyst Lloyd Byrne downgraded Centennial Resource Development (NASDAQ: CDEV) from Buy to Neutral with a price target of $8.50 (from $7.50).

The analyst comments "Levered to Higher Pricing, PT $8.50/share We are lowering our rating to Neutral. CDEV has been the best performing E&P this year and since mid-4Q20, and we are reducing the rating tied to risk / reward. To help investors assess this, we've gone through our corporate and NAV models and applied different pricing scenarios: (1) $50/bbl WTI, (2) the UBS E&P Deck, and (3) $65/bbl WTI. With the higher cash flow projections, the immediate debt concerns that plagued CDEV in mid-20 are largely alleviated, with current strip showing ~$564mn in '23 EBITDA. This recognition has been important to CDEV's equity performance YTD, as debt concerns gave way to optimizing reinvestment and bringing forward value. This is now well understood though, and was the catalyst for removal of the most pressing bear thesis. At current pricing we see risk / reward as more balanced based on our scenario analyses."

For an analyst ratings summary and ratings history on Centennial Resource Development click here. For more ratings news on Centennial Resource Development click here.

Shares of Centennial Resource Development closed at $6.81 yesterday.

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