Sterne Agee Maintains Buy, $35 Target on Chesapeake Energy
Sterne Agee reiterates its Buy rating and $35 target price on Chesapeake Energy (NYSE: CHK) as the company highlights EBITDA growth path through weak gas price environment.
Sterne Agee comments, "Amid a collapsing natural gas futures strip over the last few months, Chesapeake was a first mover in the industry, announcing this week it would lower natural gas production and reduce its dry gas drilling budget by dropping gas rigs. We believe this signal contributed to massive short covering of natural gas-focused equities and helped stabilize both the equities and the natural gas futures strip. By moving first, the company has de-stigmatized the inevitable budget cuts that are likely to be announced as 2012 capital programs are released in conjunction with year-end earnings."
CHK closed at $22.49 a share on Tuesday.
