UPDATE: Citigroup Initiates Buy, $5 PT on Magnum Hunter Resources

Citigroup initiated its coverage on Magnum Hunter Resources MHR with a Buy rating and a price target of $5 on the company's resources and production outlook. Citigroup noted, "Since May, MHR's shares have sharply underperformed the E&P sector and the broader markets. Consequently, shares currently trade at only 64% of proven only NAV vs an avg of 90% for our E&P coverage group. Considering its long-life drilling inventory with attractive economics, the substantial upside relative to its proven reserve base and solid, oil/liquids-rich production growth outlook, we think shares should trade at least inline with the group on this metric. Thus, we are establishing a price target of $5.00 per share (~90% of proven only NAV) and initiating coverage with a Buy rating." Magnum Hunter Resources closed at $3.50 on Monday.