UPDATE: Credit Suisse Lowers Target on Hess to $95
Credit Suisse reiterates its Outperform rating on Hess (NYSE: HES) but lowers its price target by $20 to $85 a share until confidence on the stock returns.
Credit Suisse says, "For the third quarter in a row, HES earnings have been below consensus. Despite a disrupted year for volumes in 2011, HES offered only 0-5% growth as an outlook range for volume growth in 2012. There should be a bounce in the "bounceback". This is calling into question management credibility, but we think unfairly so. ...We believe management executed well in the main area over which they had control - the Bakken. Fires, floods and wars are hopefully exceptionals. We show that there is a timing disconnect between resource NAV which is significantly above today's share price and the near term volume/free cashflow performance. Time should close this gap. Management can help by selling non-core assets (addressing any balance sheet concerns) and communicating confidence in their medium term growth outlook."
HES closed at $57.31 a share on Wednesday.
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