KLR Group Downgrades Sanchez Energy (SN) to Hold

KLR Group downgraded Sanchez Energy (NYSE: SN) from Buy to Hold with a price target of $8.00 (from $9.00) on valuation.

Analyst John Gerdes commented, "We are downgrading SN from Buy to Hold. We are decreasing our target price $1 to $8 per share due to lower liquids price realizations and slightly higher operating expense. Since late January, SN has tripled and now approximates our target price, thus requiring a downgrade to Hold.

Sanchez’s mid-cycle (’18) capital yield (cash recycle ratio) is 105%-110% versus the industry median of ~130%. Our ’16 production expectation of ~55 Mboepd is ~6% above company guidance (48-52 Mboepd). Our economic model assumes Sanchez conducts a three-rig program in ’17 and four-rig program in ’18 assuming a commodity price recovery."

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

Shares of Sanchez Energy closed at $8.36 yesterday.

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