BMO Capital analyst Phillip Jungwirth maintained a Buy rating on Chesapeake Energy (CHK – Research Report) today and set a price target of $85.00.
Phillip Jungwirth has assigned a Buy rating to Chesapeake Energy based on a comprehensive evaluation of the company’s strategic acquisition and the resultant financial benefits. The merger with Southwestern Energy is anticipated to be highly accretive to Chesapeake’s cash flow per share, contributing to a noticeable increase in the company’s free cash flow per share as well. The acquisition is also expected to yield significant overhead and operational synergies, enhancing the overall financial profile of the company. Jungwirth highlights that the deal aligns with Chesapeake’s stringent M&A criteria, offering a fair premium to Southwestern’s stock while adhering to a disciplined approach.
The report further emphasizes Chesapeake’s reinforced position in the natural gas sector, now boasting a leading footprint in both the Haynesville and Appalachian regions. This strategic positioning is poised to capitalize on the anticipated growth in demand for liquefied natural gas (LNG). Additionally, the combined entity is projected to offer a substantial inventory of locations with an estimated 15 years of drilling inventory, ensuring long-term production capabilities. With these factors in mind, Jungwirth deems Chesapeake’s valuation attractive and acknowledges the company’s strong potential for capital returns in 2023, further solidifying the Buy rating.
In another report released today, Benchmark Co. also maintained a Buy rating on the stock with a $93.00 price target.
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Chesapeake Energy (CHK) Company Description:
Chesapeake Energy Corp is a US-based exploration and production company. It is engaged in the acquisition, exploration, and development of properties for the production of oil, natural gas and natural gas liquids from underground reservoirs. Geographically, the company focuses its exploration, development, acquisition and production efforts in the operating areas of Marcellus, Northern Appalachian Basin in Pennsylvania; Haynesville, Northwestern Louisiana and East Texas (Gulf Coast); Eagle Ford, South Texas; Utica, Southern Appalachian Basin in Ohio; Mid-Continent, Anadarko Basin in northwestern Oklahoma; and Powder River Basin, Stacked pay in Wyoming.
Read More on CHK:
- M & A News: Chesapeake Energy (NASDAQ:CHK) Will Acquire Southwestern Energy for $7.4B
- Chesapeake, Southwestern Energy merge in $7.4B an all-stock transaction
- CHESAPEAKE ENERGY CORPORATION AND SOUTHWESTERN ENERGY TO COMBINE TO ACCELERATE AMERICA’S ENERGY REACH
- Chesapeake price target lowered to $106 from $112 at Truist
- M & A News: Chesapeake, Southwestern Near $17B Merger
