UPDATE: Global Hunter Securities Downgrades Callon Petroleum to Accumulate on Liquidity Concerns
Global Hunter Securities reduced its rating on Callon Petroleum (NYSE: CPE) from Buy to Accumulate and reduced its price target from $8 to $6.
Global Hunter Securities said, "We're dropping our Buy rating to Accumulate until CPE addresses its current liquidity situation. After Q3's hurricane downtime the company is left with just $36MM on the revolver and we estimate an outspend of approximately $19MM in Q4. CPE has plenty of options (refinance and upsize its 2016 notes, sell non-core assets, sit back and bank on its borrowing base being revised higher as additional Permian wells come online, etc), and with a net debt-to-cap of 46%, were not talking a ATPG-type liquidity problem by any stretch. However, the market despises uncertainty, and we think this puts a damper on CPE's short-term performance."
Callon Petroleum closed at $4.62 on Monday.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.