In a report released today, Gabriele Sorbara from Siebert Williams Shank & Co reiterated a Hold rating on Chesapeake Energy (CHK – Research Report), with a price target of $86.00.
Gabriele Sorbara has given his Hold rating due to a combination of factors relating to Chesapeake Energy’s recent performance and future guidance. The company’s fourth quarter results for the year 2023 were somewhat positive, but they were overshadowed by the less than favorable standalone guidance for the year 2024. This forecast demonstrated inefficiencies and was set against a backdrop of a challenging environment for gas. Moreover, the cost expectations for capital expenditure were above what industry consensus had anticipated, indicating potential financial pressures.
Sorbara’s assessment also took into account the production guidance for the first quarter of 2024, which, despite being within the predicted range, requires a significant capital outlay that exceeds consensus estimates. The planned capital expenditure to achieve the targeted production midpoint is notably higher than the market’s expectations, which might lead to negative reactions from investors. Furthermore, with a significant portion of the wells already turned in line (TIL’d) in the first quarter, there is an implication of front-loaded spending, which could affect the company’s performance later in the year. All these elements contribute to the Hold rating, suggesting that while the company is maintaining its operations, there are considerable uncertainties and risks that prevent a more favorable recommendation.
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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:
- CHESAPEAKE REPORTS FOURTH QUARTER AND FULL-YEAR 2023 FINANCIAL AND OPERATING RESULTS AND ISSUES 2024 OUTLOOK
- Chesapeake signs long-term LNG liquefaction offtake agreement
- Southwestern Energy downgraded to Neutral from Buy at Seaport Research
- Buy Chesapeake stock, natural gas merger coming at right time, Barron’s says
- Southwestern Energy downgraded to Neutral from Positive at Susquehanna
