Stifel Nicolaus raises its rating on Chesapeake Energy Corporation CHK to Buy from Hold as current price appears attractive as an entry point. Stifel Nicolaus establishes a $29 target price on shares.
Stifel Nicolaus says, "Current stock level provides an attractive entry point. Since the recent July 2011 high for the space, CHK is down 30% while the EPX is down 16% due to
natural gas price weakness and the resulting impact of funding issues. Concern is for those with a 3-9 month view. The low gas price causes two issues, the cash flow drops meaningfully resulting in the company's 2012 EV/EIBTDA valuation not necessarily looking attractive. Secondly, the funding gap widens creating additional concerns at the same time the EBITDA valuation is no longer looking attractive for those with a 3-9 month outlook."
CHK closed at $23.77 a share on Thursday.
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